Although there is a rise in new-home construction, the current housing market is either making homebuyers settle for older homes or keeping potential homebuyers in their existing homes.
We’ll note the average age of homes in the U.S., how a home’s age impacts homeowners insurance, how to find the best insurance for an older home and ways to make your rate more affordable.
Average Age of Homes in the U.S.
As you would expect, different regions have different average home ages. So it makes sense that the areas that were the first to settle would have homes with an average age older than areas that haven’t been developed until recent years.
Old cities like Philadelphia and New York have homes that tend to be older than homes in newer cities like Phoenix and San Antonio.
Regardless of where you live, though, you know how old your house is and the unique issues it faces related to its age.
Home’s Age and Insurance Costs
You might think that a home’s age is directly related to the cost of home insurance. And if so, you’re probably assuming that the older the house, the more expensive it is to insure. However, while the era in which a home was built may be associated with aspects that make it a higher risk to insurance companies, other factors might bring the cost down.
Insurance companies look at several factors when calculating insurance premiums.
Home’s Age and Risks
Insurance premiums are based on calculating the risk that you’ll have to file a claim with your insurer. So, as a home ages, some risks increase.
For example, as your plumbing ages, there’s an increased risk that a pipe will break and you’ll deal with a flood, necessitating filing an insurance claim.
There’s also an increased risk that your home’s electrical wiring could malfunction and lead to a fire. Even the fact that some older homes aren’t designed to handle the draw of some modern electrical appliances can increase your risk.
Home Materials and Insurance
Just as some common issues with older homes make insurance higher, others result in lower insurance premiums.
For example, if your home is built of bricks or stones, there’s a lower risk of a total loss in a fire, so you’ll pay lower insurance premiums.
Until World War II, many old city building codes required homes to be constructed of masonry. Homes since then have mostly turned to masonry as a facade and not a building’s structure.
Previous Claims Impact Insurance
People who have filed claims are more likely to file them again, so your claims history is one of the most significant components of your home insurance premiums. So, whether your home is old or new, you’ll pay lower rates if you haven’t filed a claim for several years.
Coverage Limits and Policy
You get to choose your policy, limits, and deductible. Each of those components affects how much your coverage will cost.
A policy covering the replacement cost of household items is far better than one that only covers the depreciated value, but it costs more.
Your insurance provider will cover the value of your home, but you can decide how much liability coverage you need. If you need higher limits of liability coverage than what you have, you might be better off purchasing an umbrella policy that provides liability coverage over your other lines of coverage, including home and auto.
Saving Money in an Older Home
Sometimes, living in an older home costs more than a new home because of the technological advances that weren’t around when the home was built. With some updates, though, a current investment could help you save money every month for the rest of the time you live in the house.
Often, your home insurer will offer you a discount if you install a security system. Before settling on a system, make sure you choose one that your insurer recognizes. Some insurance companies have even formed partnerships with home security companies to offer customers discounted installation and setup costs.
Some of the safety systems you should consider purchasing include the following:
- Alarm systems
- High-security locks
- Security cameras
- Window security bars
Insulation Improvements for Old Houses
Homes didn’t use to be built with any insulation at all. For example, if you were to knock down the interior plaster walls of a Victorian-era house, you would find only air between the studs. A home without insulation will cost more to heat and cool.
In recent years, spray-in foam insulation has made it easier to insulate a home without having to do extensive renovations.
Updating wiring isn’t as simple as spraying in insulation. There’s no way around the fact that rewiring a house is a significant task, but if you make the investment, you’ll have a safer home, which could give you lower insurance premiums.
In addition, the convenience of having outlets where you need them and circuits that can handle a hair dryer and curling iron plugged in at the same time is hard to put a price tag on.
Windows and door frames can be drafty even in newer homes, but they’re almost always an issue in older homes. If your home has period windows that you’d like to keep, you can consider adding storm windows for added insulation during the winter months.
If you can replace your windows and go with energy-efficient ones, you’ll save on heating and cooling costs every month.
Check around your window for drafts and seal them with caulk. You can also check around your door for drafts. Pay special attention to the bottom of the door. You may need to add a draft stopper or consider using a door snake to block cold air from entering.
The right drapes can double as home decor and insulation around windows, so look for insulated or double-paneled options when choosing window treatments.
Then, maximize the sun’s warmth during the winter by keeping your drapes open when the sun is shining directly. Close the curtain when the light is gone to keep the warmth of your home in and the cold out.
It’s hard to compete with the charm and character of an older house. But, if you’re finding yourself frustrated by some of the costs associated with an older home, follow these tips to help you save and still enjoy where you live.
Melanie Musson writes and researches for the insurance comparison site, ExpertInsuranceReviews.com. She’s passionate about helping others find the best insurance policy to meet their needs and protect their financial stability.