Here is the 2nd part of the article from the spring 2016 Insurance Institute Bulletin which talks about what factors insurance companies can use to determine the cost of insurance.

• Home’s Age and Type of Construction
• A new home’s overall structure is likely to be in better shape than that of an older home. Therefore, newer homes have lower homeowners insurance rates. Important features in a new home include:
  • Electrical wiring
  • Plumbing
  • HVAC system
• Additionally, homes constructed with sturdy, fire-resistant materials like brick, concrete and stone are cheaper to insure than homes constructed with soft, flammable materials like wood.
• Home’s Location
• A home’s location impacts rates for homeowners insurance in a major way. Rates may be higher if:
  • The home is at-risk for wildfires, tornadoes or other natural disasters
  • The home lies in a high-crime area
  • Building costs in the area are high
  • There is not a fire station within 5 miles
• Claims History
• If you don’t need to file an insurance claim, don’t. Homeowners who file frequent claims pay higher rates for homeowners insurance. To keep costs low, handle small fix-it claims yourself.
• Risk Factors on the Property
• Properties with risk factors will incur higher homeowners insurance rates. Pricey risk factors include:
  • Swimming pools
  • Guest houses
  • Aggressive dog breeds
  • Trampolines
• Many insurers won’t extend coverage for these perils, and some will deny coverage altogether.
• Credit Score
• The higher a homeowner’s credit score, the lower their risk level. Statistically, homeowners with good credit file fewer claims than homeowners with poor credit. As a result, they’re rewarded with cheaper homeowners insurance rates.