Home Improvement

Published on June 17th, 2019 | by admin

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Factors that affect home insurance premiums

Home insurance is commonly known as homeowner’s insurance. It is a type of property insurance which covers a private residential property. Home insurance covers losses and damages to an individual house and assets available in the house. Home insurance is designed to bring your home back to the same condition it was in, before the loss occurred. There are different homeowner’s insurance plans available, and you can select one which meets your requirements. Home insurance premium is affected by several factors including

Coverage: The amount of coverage you choose has a significant impact on the insurance premium.

Location of the house:Home insurance rates vary from region to region, neighborhood to neighborhood, or even street to street. Each region, state, and city has a unique insurance risk and your insurance policy reflects that risk. Things which affect the insurance premium in your area can be crime rate, closeness to natural hazards such as earthquake, flood, and fire. If your house is located in an area which is more prone to natural disasters then you have to pay a higher premium.To reduce the insurance premium you can make your house less susceptible to natural disasters. By maintaining roof and windows in a good condition you can avoid a lot of weather-related damage. Make sure your house is built with region appropriate materials like certain roofs are better suited for specific climates. Type and quality of roof play an important role in the price of Home Insurance Premium. If you are living in a hurricane-prone area, then installing storm windows can help you. Storm windows can withstand destructive storms and can save your home from significant damage.

Security system: If you have installed a home security system, you can expect a discounted insurance premium. According to a recent research, installing security system can reduce your home insurance premium up to 20%. The chances of burglary are higher in the homes which do not have a security system. Insurance companies know that professionally monitored security system adds extra layer of protection. Home security systems reduce your chance to file claims with the insurance company.

Proximity to firehouse: If your house is located near a firehouse, it can help you in getting a reduced insurance premium. If your house is far away from the fire station the risk of damage from fire is higher because of the longer response time of fire department, so insurance companies charge a higher premium. Insurance premium is directly proportional to the level of risk. If your house has more risk, the premium will be higher.

Condition and age of the house: The age of your house has a significant impact on the premium. If your house is well maintained and new, you will be charged a lower premium. Other than age and condition, size of the house and the cost of reconstruction also play an important role in deciding the insurance premium. If you are doing some home improvement make sure your insurance service provider knows about that and cover your improvements. It is also important for the insurance buyers to know the cost of construction of the house in case it is damaged. Insurance companies also check whether it is difficult to construct the house or not.

The material used in building the house: Brick house are charged lower insurance premium than a house which is built with wood or other flammable materials.

Insurance score:Your insurance score is like your credit score which can significantly affect the insurance premium, and even your ability to secure a policy. People who have a low insurance score are considered a financial risk for the insurer. So try to maintain a good insurance score by avoiding payment defaults, pay your credit card bills on time, carry a modest balance on your credit cards, etc.

Claim history: Your claim history does matter for the insurer.  You may change your residential place but the claims which you have made will always follow you. There is a correlation between the claims you have made in the past and the likelihood of claims being made in the future.

Marital status: If you are married, you can get a discount on the insurance premium. With historical data, it is proven that married homeowners file fewer claims than singles and insurer consider them more mature.

Pools and other amenities:  Swimming pools and trampolines are the nice features for your house but these amenities may increase your insurance premium. Pool and trampoline are considered as a risk by insurance companies as they increase the risk of injuries and accidents, especially when they are easily accessible. You need extra liability coverage in case someone is injured.

Wood-burning stoves: If you have a wood burning stove it can increase your insurance premium, but you can limit this by providing proof to the insurer that your wood burning stove meets code requirements and was installed by a licensed contractor.

These are some of the factors which usually insurance companies consider at the time of calculating insurance premium. However, some insurance companies may also consider factors which are not on the list. The factors which the insurer uses to calculate premium can have a significant impact on the insurance premium. That is why it is recommended to check as many offers as possible to save on premium.


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