Looking to buy a home in Oklahoma? You’re probably wondering, “How much will my Oklahoma home insurance cost?”
Whether you’re a native of the Sooner state or moving here from elsewhere, you likely understand the variety of natural disaster risks we face. From hailstorms, tornados, and ice storms to wildfires and even earthquakes, Oklahoma is a hazardous place for a house!
The Insurance Information Institute has interesting estimates, but the cost of home insurance in Oklahoma varies widely so any attempt to make a blanket estimation is difficult.
So, let’s start by looking at things which have the biggest impact on the cost of your home insurance.
- Good credit, bad credit, no credit: If you’re able to qualify for a home loan you likely have pretty good credit. Insurance companies use credit as a rating factor. An “insurance-credit score” is not the same as a mortgage credit score. But in the same way that good credit means you are a “good loan risk” it is likely an indicator of a “good insurance risk”.
Credit history is a track record of “behavior.” Just like a motor vehicle report is a track record of driving behavior, this consumer behavior is used by insurance companies as a predictor of future behavior.
- Location, location, location: People tend to buy a house close to work and school…and that’s a great location. But, the “location” I’m referring to are areas of Oklahoma that historically have higher risks of storms, or where the threat of wildfire is greater. Some areas have a higher rate of thefts.A person in Moore, Oklahoma may expect to have a higher cost of home insurance than someone who lives in McAlester, Oklahoma. Moore is in the heart of “tornado alley” in central Oklahoma.
- This old house: New houses tend to have lower premiums as compared to older houses. Why? Older houses usually have a greater likelihood of having water pipe leaks. (A water-pipe leak is the second most common home insurance claim.)
- Market Value vs Reconstruction Cost: Big houses are usually more expensive to insure than smaller ones. That’s probably no surprise. What you pay for the house is referred to as the “Market-Value.” This doesn’t always equal the cost to rebuild the house. If there is a 2500 square foot house with a market value $100,000 and another with a market value of $300,000, they will both have a similar insuring amount (reconstruction cost) because the cost to rebuild them would be similar.
- Bundle up: Any insurance company that insures your house will discount your cost (25% – 40%) if you insure your cars with them too. The more business you “bundle” with the same company, the deeper the discounts usually get. Insurance companies know if they can help you with multiple things, you will be more likely to stay with them for a longer time.
- We’re in this together: People always ask me for the best way to reduce the cost of their insurance. The answer is simple: CARRY A HIGH DEDUCTIBLE. If you file an insurance claim, you will have a “deductible”. This is the part of the loss you will pay. If you are willing to take on a larger deductible, the insurance cost will be greatly reduced. (Higher deductibles can reduce your cost by 25% – 40%.) If you want the insurance company to pay for the majority of your insurance claim, you will pay more for your policy.
BEWARE! – Your realtor and loan officer WILL NOT know how much your home insurance will cost! They are experts at helping you find your home and getting your loan ready, not insurance.
You need to work with an insurance professional to get your home insurance prepared.
YOUR HOME IS YOUR MOST VALUABLE ASSET – Your home insurance is the only product that will help you repair or rebuild your home if it’s damaged or destroyed. The realtor and loan officer will be long gone by then.
Who are the best insurance companies? There are many insurance companies to choose from. Some are clearly better than others, but your experience will be heavily influenced by who you choose to be your insurance agent.
I know what you’re thinking… Great tips, but can’t you at least give me a ballpark idea of what my home insurance will cost?
I can do better than that! I can tell you EXACTLY what your home insurance will cost! Here’s something you will really like – it will take only a fraction of the time you will spend looking for your house or going through the loan process!
Give me a call at 405-340-0606.
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