The following is a guest post from Eric Kossian of Leavenworth Insurance
Home insurance pricing is affected by a number of factors; I will try to discuss in order of importance, with those factors that affect the rate the most listed 1st.
Credit Score: a good credit score will give you up to a 50% discount because it is the single biggest statistical determinate for future claims.
Size of the Home: a mansion will cost more than a bungalow.
Location of the Home: Is the home within 5 miles of a fire station and if so, what is the quality rating of that station. For example, a home in Seattle is a class 2 whereas a home in a small town is usually a 4 to a 6 rating. The higher the rating the higher the premium. Homes without hydrants within 1000 ft or outside the fire district 5 mile limit will pay significantly more. Location also determines if the home is in a flood zone and how severe the flood risk is. I would think very seriously before buying a home in a 100 year flood zone as a flood will severely disrupt your life for at least 6 mo. and you will be required to pay flood insurance (the Federal subsidy of which is getting smaller and smaller) which is expensive because it is a known loss waiting to happen.
Condition of the Home: If the home has any one or more of these items: pressurized pipe that is galvanized metal, has electrical that has not been completely updated to romex wiring and at least a 100 amp breaker panel ( no knob and tube or cloth wires), a roof that is not in good condition or over 25 years old, the home is not on a cement perimeter foundation, or the home is not in good upkeep, then you will pay 2-3 times the premium and likely be in a secondary insurance market that is not as well regulated and the coverage will not be as broad.
Prior Claims at the Home: You may be just buying the home but if the previous owner had insurance claims in the last 5 years, you will likely pay more for a few years.
Which Insurance Company You Select: Believe it or not, there really is big differences in prices between insurance carriers for home insurance, with a price swing of about 30% for a preferred home. Even more importantly, unlike car insurance which has pretty much the same coverage no matter the insurance carrier chosen, coverage on homes varies greatly so be sure to ask for Guaranteed Replacement Cost, Comprehensive Perils, Ordinance and Law Coverage, Back Up of Sewer and Drain Coverage and Additional Living Expense of at least 25%. You won't necessarily pay more for these due to all other factors listed above but you'll certainly save many thousands if you have a claim and have these options.
A Educated Insurance Agent: If they don't know what the options are in the above paragraph are or if they don't seem to really be shopping for you, then move on to a different agent. In the real estate arena, a good real estate agent, good mortgage broker and good insurance agent are worth taking the time to find.
Eric Kossian, Wash. State Insurance Agent
Ph. Toll Free: 1-877-548-5488
NEW TOLL FREE FAX # 1-888-548-6592