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How does your insurance company determine your premiums?

10 things you should know that go into your home insurance rate
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Your home is likely your biggest investment and to protect that investment,  there’s home insurance. Home insurance can cover certain types of unforeseen damage to your home like fire or flooding and protect you from the costs of a lawsuit if someone were injured on your property due to a trip-and-fall.

There are many elements of your home that go into determining your insurance rate. And like auto insurance, this rate can vary between insurers.

What affects your home insurance rate? 

Here are 10 things insurers use to determine home insurance rates:

How old is your home?

Homes with newer plumbing and electrical systems are less susceptible to fire, floods or other hazards, reducing the likelihood of you making a claim. As a result, some insurers offer a new home discount that will lower your premium.

Home insurance claim history

Having a history of home insurance claims could mean higher rates. However, this shouldn’t stop you from submitting a claim. Single claims typically won’t flag you as high-risk.

Swimming pools

Swimming pools impact home insurance rates because they not only increase the replacement value of a home, but also create a greater potential for a liability claim if someone is injured or drowns on the property.

Replacement cost

Like a home with a swimming pool, homes that have a higher replacement cost due to pricy finishes or more square footage will carry a higher premium. 

Fire stations and fire hydrants

Fire stations and fire hydrants are typically abundant in urban areas. But for those who live in rural areas where access to hydrants and emergency services are limited, their premium could be affected.


Depending on the materials used, old plumbing systems are more likely to rust or crack than newer copper or plastic plumbing potentially causing water damage and subsequent insurance claim. 


Like older plumbing systems, dated electrical systems could consist of knob and tube wiring, aluminium wiring, or a fuse box instead of breakers. All of this adds up to potential system failure and risk of fire. 

Home heating system

Heating a home using primarily oil will result in higher insurance rates. The oil tanks used in these home heating systems pose a costly environmental hazard if a leak occurs. Home insurance providers will need specific details about the age and condition of the tank. 


A home’s roof is meant to protect people and its contents from the elements. But if the roof is old, there is a greater chance for leaks and damage. If a roof is past its prime, it could be challenging to get coverage without replacing it.

For more information on your home insurance rates, or for a competitive quote, click here