Wednesday, November 22, 2017

Things that Affect Home Insurance Premiums

October 13, 2013 by  
Filed under Real Estate

Homeowner’s insurance can be a little confusing when it comes to figuring out how the premium rates are arrived at. Once you know how these are determined, it’s easier to know how to get rates you can afford while still getting the coverage you need. It’s not as confusing as you may think.

When your premium is determined, it really means that the insurance company is figuring out how big a risk you are.

Some of these determining factors are:

• The location of your home: If you live in a high risk area such as the Gulf coast or high crime neighborhoods, it will dramatically raise your premiums.

• The Cost of your home’s construction: This tells the insurance company how much it will cost to rebuild your home should anything happen to it. The more it costs the higher your premium will be.

• Materials used in your home construction: Brick and other types of stone tend to handle the high winds of hurricanes and tornados. If your home is made or partly built from these materials, your premium will most likely be lower.

• Other risk factors: Insurers want to know if you have things like swimming pools, trampolines, or hot tubs on your property as well as the breed of dog you own. Each of these factors increases the chance of injury occurring on your property and affects your insurance rates.

You can still save money on homeowner’s insurance even if any of these things apply to you. Before you shop for a home insurance quote, there are things that you can do to lower your insurance premiums.

These include:

• Making upgrades: Even though you can’t change the location or construction of your house, you can still upgrade it by improving the heating and plumbing, installing sprinkler systems, extra smoke detectors and better locks.

• Making your home safe: Fences around swimming pools and trampolines can make them safer. You can also choose to have a dog that isn’t dangerous.

• Get replacement cost insurance: Your house will probably cost more to replace or rebuild now than initially. If you insure your home for replacement cost, it can save your money if you need to file a claim.

• Have an annual policy review: This keeps it up to date with regard to items covered.

In addition to these tips presented here, you should always ask your insurance agent to see if you’re eligible for any discounts that can save you even more money.

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