Home insurance rates can, and do vary according to where you live – and rightfully so. Just like when it comes to making that real estate purchase, location matters with your home insurance. Unlike with car insurance that is controlled by you and is typically not stationary. Your home is a permanent fixture which is why there are several factors related to your location that can and will have an impact when it comes to determining your insurance rates. This is why you shouldn’t expect your rates to stay the same if you move.
If you’ve ever wondered what the factors were that cause your insurance to be higher than your friends that may live in a different neighborhood, here are a few things to consider:
Location affects fire protection
A good example of a street to street difference is two identical homes on opposite sides of the street; the house on the left is in town and is serviced by a municipal fire department; meanwhile, the house across the street lies outside city limits and is served by the volunteer fire department.
One fire department has an average response time of under 5 minutes and the other has an average response time of 15 minutes. In this example, it’s not hard to understand why one homeowner pays less for insurance than the other–even though everything appears to be the same.
There is a risk of more damage from a fire to the home outside of city limits because of the longer response time of their local fire department.
Your home might be susceptible to flooding
It’s not just about your proximity to the lake, or other bodies of water that can make your home more prone to flooding. Other factors such as the elevation of your home on your street, what the drainage system is like, or even how your home is positioned can make your home more susceptible to flooding.
Insurance companies will take this into consideration when it comes to your premiums, and in some places in Ontario you’ll find that certain water damage coverage may not be available to you. It’s a great idea to discuss your water damage protection options with your broker.
Neighborhood to neighborhood differences in home insurance rates will always occur for a number of reasons, even when those homes are found within the same municipality. Again, this depends upon the home’s proximity to certain risks like we mentioned above; as well as other things like crime rates, and other environmental factors such as the chances of wind and ice storms for example.
If your home is situated close to fire hazards, your house will obviously run a higher probability of catching fire, which again is another risk that raises rates. Fortunately, for us in Ontario, hazards such as forest fires are fairly rare occurrences in comparison to our friends in Western Canada.
You can’t pick your home up and move it, but you can do your part to manage these potential risks by taking the appropriate measures to protect or at the very least minimize the impact on your home should anything occur.