When considering purchasing homeowners insurance, you should consider the major factors that impact your home owner’s insurance premium. These factors determine your rates, and they can influence your insurance costs. Being knowledgeable about these factors will help you to maintain affordable insurance premiums. There are ways that you can reduce your homeowners insurance premiums by learning the steps to take and by doing a little research.
Remember, your home is your biggest investment, and you want to take the necessary steps to protect it, however, there are factors that can influence the costs associated with protecting your investment. In considering ways to help reduce your homeowners insurance premiums, you will want to consider the factors listed below.
What factors influence homeowners insurance rates?
1. Claims History- Your previous claims history will affect your premiums. Previous claims will contribute to increased insurance costs. You may want to consider making your own repairs, when possible, in order to avoid having to file multiple claims, thus resulting in increased insurance costs.
2. Age/Condition of Your Home- The age and condition of your home is a major factor that influences insurance costs. You will want to perform regular maintenance on your home, as maintenance issues can contribute to increased premiums and costly repairs in the event of a loss.
3. Construction Materials- Your home’s construction materials will definitely impact your homeowners insurance. For example, a home constructed of brick would be less costly to insure than a home that is constructed with mainly wood.
4. Geography- Your geographic location is a major factor in influencing your insurance costs. Insurance providers calculate your geographic location along with other factors, especially if you live in an area that is prone to natural disasters such as, tornadoes or wildfires.
5. Replacement Costs- Insurance companies typically charge more to insure homes that have high replacement costs. Again, you will want to consider having a routine maintenance schedule for your home, as this can become a major problem for you in the event of a disaster or other loss.
6. Potential Risks- Insurance companies also consider potential risk factors for loss that include: personal property, personal injuries on your property, vandalism, and the potential for fires and other hazards. To minimize potential risks to your property, you will want to install a burglar alarm system, fire & smoke detector systems, and deadbolt locks.
7. Your Credit History- Insurance companies may also consider your credit history when determining your insurance rates. Although they may not deny selling insurance to you based on a negative credit history, they can use this information as a basis for determining your premiums.
In conclusion, being knowledgeable about the factors that impact your homeowners insurance can save you an enormous amount of money. Many of the factors that contribute to higher insurance rates involve maintenance issues that can be prevented or reduced, therefore, reducing your insurance costs and the likelihood of multiple claims filings.