The home insurance policy premium reflects many characteristics of the property, including building materials. Property risk is assessed by its relative flammability and destructibility by covered perils.
A steel beamed, poured concrete home is less likely to burn than a frame structure. However, a frame home is less likely to sustain damage during earthquakes. Building materials factor into the likely causes and extent of losses.
Most modern homes are either wood frame construction with siding or brick veneer. The homeowner policy premium reflects the differences in potential losses characteristic of these building materials. A discount is available for superior grade construction, such as poured concrete homesor pure masonry materials for the outer walls.
Frame construction homes burn more readily and completely than do brick veneer structures. For this reason, frame homes cost more to insure than brick veneered houses of the same value in the same locations.
Additionally, insurance rates are lower for homes built on site, or stick built, than for modular or mobile homes. Premiums, however, reflect the value of the homes as well. Modular rates may be high, but values tend to be lower.
Some home insurance covers personal property and building improvements only, not the building itself. Condominiums, particularly high-rise construction, may be built from a broader variety of materials. Although the buildings may be fire resistive construction, the risks from interior causes of loss do not change dramatically. For example, a kitchen fire is equally likely in any home. The premium will be reduced to reflect the lessened exterior driven perils but not dramatically.
Loss prevention devices, such as bolt locks, security systems and sprinkler systems, decrease premiums by reducing risk on any style home. Smoke detectors, although very common and required by modern building codes, are a consideration in premium calculation.
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