Everyone wants cheaper insurance for their home that provides the best coverage.
How does an insurance company calculate your homeowner’s insurance rates? What makes one house more costly to insure than another? The answer may surprise you. Here are some of the things that are used to figure out your homeowner premium.
- How much would it cost to rebuild your home? Just suppose your home was destroyed with a fire or storm what can it take to rebuild on your own? In the basement to the attic what can it cost to resurrect it from the ashes just as you remember it? Don’t be surprised if it's more than you owe on your mortgage. After all, inflation has a means of increasing the price of materials and labor, doesn’t it?
- What is your home made of? Wouldn’t you expect that the all brick home would cost several which has vinyl siding? Doesn’t it seem sensible that hardwood floors would cost more than builder grade carpeting?683
- Where may be the fire department? Doesn’t it make sense that the closer you are to the fire department or a fire hydrant the sooner your fire could be put out? So too the further you're away the greater the chance your home could burn to the ground for a complete loss to the insurance company.
- How old is your home? Many older homes used materials that are very expensive to replace or upgrade. They also have old worn-out electrical wiring that could cause fires. While you can imagine, newer homes have more affordable premiums.
- Your claim history: How many claims perhaps you have had within the last few years? Are you aware when you have several claims in the recent past, then you're considered a higher risk versus someone with no claims? This is why we suggest a higher deductible to be able to pay for smaller problems from pocket.
- Your neighbor’s claim history: Why would your neighbor’s claims affect your premiums? Simply put, if your neighborhood has a history of lots of break-ins, vandalism, arson, etc., then your own insurance company will raise rates according to those statistics.
- What is your credit score? Yes, believe it or not, a much better credit score implies lower risk to the insurance coverage company.
- What kind of insurance policy will you get? Will you be getting an actual cash value or a replacement cost policy?
- Do you have expensive jewelry, artwork or collectibles? If you do, you might need to include insurance riders that are made to protect your valuables just in case they are worth more than the standard amount covered in your policy.
- What kind of pet do you have? We know you love your dog and that they'd never hurt a fly! However, after exploring the statistics we find that certain dog breeds have more incidents of biting people than the others. Therefore, clients that have a pet on the dangerous dog breed list, like a Pit Bull or an Akita, will pay a higher premium than those that don’t.
- How long have you been with your current insurance company? Insurance companies reward loyalty. The longer you're with them, better the cost you will usually receive.
- Do you have a pool? The chance of drowning incurs a higher premium than should you didn’t have a pool.
- Do you have a trampoline? Did you realize that billion dollars is paid out every ten years due to trampoline accidents? Don’t be surprised if a carrier will not cover you or will exclude the trampoline accidents out of your policy.
- What discounts do you be eligible for a? Your agent will walk you thru a number of questions that will tell us what home insurance discounts you be eligible for a. Examples of discounts include obtaining a discount for a monitored security system or for combining it together with your auto insurance.
We have discussed 14 different things that are taken into account when calculating your homeowner’s policy.
Your InsuranceHub agent is standing by, ready to show you how easy it is to obtain an affordable quote right now.