How Insurers Calculate Your Risk
Homeowners insurance pricing is incredibly localized. Two identical houses built the exact same year can have vastly different premiums if one is located in a coastal hurricane zone and the other is inland.
Dwelling Coverage vs. Market Value
A common mistake is assuming you should insure your home for its real estate market value. Insurance is based on replacement cost—how much it would cost a contractor to buy lumber, pour a new foundation, and rebuild the house from scratch if it burned to the ground today. The land your house sits on doesn't burn down, so land value is not included in your dwelling coverage.
The Impact of Home Age and Roofs
Insurers love brand new homes because the wiring, plumbing, and roof are built to modern, strict building codes. Older homes are statistically much more likely to suffer a catastrophic plumbing leak or electrical fire.
The roof is the single most important factor an underwriter looks at. If your roof is over 15 years old, many carriers will either refuse to write a policy or will only offer "Actual Cash Value" coverage for the roof (meaning if a hail storm destroys it, they will only pay you a depreciated fraction of what a new roof costs).
What ISN'T Covered
Standard HO-3 policies exclude "earth movement" (earthquakes, sinkholes) and "water damage from the ground up" (floods). If you live on a fault line or in a FEMA flood zone, you must purchase entirely separate, specialized policies to be protected against those perils.