One of the questions I’m asked by realtors, mortgage originators, and home buyers is what do I think the home insurance is going to cost for a new or existing home. Honestly, it’s impossible to know until we quote it with our insurance companies.
What makes it difficult to guess the cost of the insurance are the many factors which impact a Texas home insurance policy’s cost including home location, square footage, number of stories, roof type, floor coverings, as well as bathroom and kitchen finish. Even the type of exterior walls a home has have an impact on one’s home insurance.
The three ways exterior walls may impact your home insurance include:
- Replacement cost
- Premium rate
- Whether coverage will be offered or not
Texas homes are constructed of many different materials. There are wood frame homes, brick and stone veneer, steel, stucco, cement fiber, synthetic materials, as well as vinyl and aluminum siding. I’ve even run into a home built in the early 1900’s that was constructed of solid brick walls.
Each of these materials has a different cost; brick and stone veneer cost more than wood siding while cement fiber and stucco cost somewhere in between. The cost of the siding is factored into the home’s replacement cost, the cost to replace the home in the event of a total loss. More expensive materials add to the home’s replacement cost, while less expensive materials keep the cost lower. In either case, the home’s replacement cost has a direct impact on the amount and cost of the home’s insurance rate.
In addition to replacement cost, underwriters take a hard look at how fire retardant a home is. Wood homes burn more easily than any other type of home. Cement fiber siding, concrete stucco, and stone and brick veneer are more resistant to a home fire. In most cases, the premium for a wood frame home is higher than one which is more fire resistant.
Most Texas home insurance companies will write a policy on a home with wood or cement fiber siding, as well as one made of stucco, brick and stone veneer. There are homes, though, that some insurance companies will refuse to write. Some companies don’t like vinyl or aluminum siding; vinyl is not fire resistant, and both are susceptible to wind and hail damage.
The most notorious siding many home insurers avoid is EIFS, or exterior insulation finishing system. EIFS is a synthetic material that looks like stucco, but has two major knocks against it, its durability and how it traps moisture in a home. Throw a baseball against an exterior wall made of EIFS and you’ll end up with a beautiful indentation or hole in the side of your home. Throw in a hail storm like the one Dallas experienced in 2012 and you can just imagine the amount of damage it could sustain.
The bigger issue with EIFS is how it traps moisture inside a home. When moisture is held inside a home which doesn’t breathe very well, you have the perfect environment for mold. No home insurer likes mold which is why most avoid writing a policy on a home with EIFS siding.
Most home buyers or owners don’t think a lot about their home’s siding, but it does impact your home insurance in these three ways. If you have a question, comment, or experience you’d like to share, post them on our Google + or Facebook pages. I’d love to hear from you!