We hear everyday about people who have had a tragedy, and have no insurance to help them repair damages, replace lost possessions, or replace the home itself. The chief excuse is the high cost of insurance. In some cases, their premiums may very well be elevated due to certain conditions with their home or property. Here are four factors that insurance companies take into consideration when making their calculations.
1. The home itself. Before any insurance company sets the amount of a premium, they must examine the property in question. Different homes, the material used in their construction, and the age of the home, does make a difference. Older homes, for the most part, are going to have more problems than newer ones. They are considered to be more at risk during storms, or other natural disasters, and more expensive to replace if it is needed. Likewise, the material is taken into consideration, and wooden, frame homes are more at risk from fire and wind damage than brick or stone. Older homes that have renovated or restored are also going to be more costly to repair or replace.
How you maintain your home is all important. Windows and doors when not maintained, will be the first to suffer damage in a natural disaster.
2.The interior of your home is also part of the equation. Those who heat with wood or open flame heaters, face higher insurance rates than someone with a conventional electric or gas furnace, if you can get insurance at all. Anyone using their home, or attached shop, for hobbies such as welding, pottery making, or other ventures involving flame or heat, will also see an increase. Even the installation of a traditional furnace, its age, and proximity to combustibles may be a factor. Smoke detectors do help decrease premium costs, as do fire extinguishers.
3.The location of the home is all important. Obviously, if you are situated in a flood zone, on the edge of an area beset by annual forest fires, in tornado prone zones, or on the edge of a cliff, your premiums are going to be high, if you can find an insurance company willing to take the risk. On the other hand, if you are near a fire station, or fire hydrant, this factor will benefit your overall cost. In hurricane zones, the addition of hurricane proof materials will also influence your cost. Fire retardant roofing and siding materials will make a difference for those in areas where fires are a possibility.
Even homes not in areas considered hazardous may be considered at risk if they are in neighborhoods with a high degree of vandalism or theft. Fenced in yards, adequate locks on the home, and alarm systems on doors and windows can help offset this liability, as will outside lighting. In some areas, iron grating on doors is recommended. An insurance company will investigate the overall instances of crime in the area, in general, when making their decision on risk.
4. What is outside your home and on your property is just as important as what is inside, since property liability is part of your policy. Any hazard on your property must be taken into account when determining your cost. If you have an inground pool, it should be fenced in, and there should be a lock on the gate to prevent anyone in the neighborhood from unauthorized access. Above ground pools normally have built in steps that should be kept in the upright position and locked when not in use.
Dogs on your property should be confined behind fences or on a lead at all times. In some instances, even the breed or size of the dog is taken into account.
Even the condition of your sidewalk or yard is important. Liability claims are sometimes made by people who have fallen or been injured on your property due to uneven sidewalks, objects left in the yard or on the walk, or hazards on the property that might cause injury. If your property is an obstacle course, your porch steps broken or deteriorating, and your porch itself wobbly, you are at risk of being sued for personal damages. Insurance agents do take this into account.
While you may not be able to alter the natural hazards surrounding your home, there are still things that you, as the homeowner, can do. When shopping for insurance, the agent will be able to point out certain aspects of your home and property that may be corrected to lower your rates. Some of these are easily remedied, and will affect cost, and the overall safety of you and your family.