What factors affect my homeowners insurance?
Home insurance coverage can differ from policy to policy depending on a multitude of factors. Being aware of these factors that affect your premium can ensure that you are appropriately covered. Read below to understand the factors that are influencing your home insurance premiums.
Your personal information
Your credit history, claims history and marital status can all contribute to your premium costs:
- Credit history – In most cases insurance companies will take your credit history into account when calculating your home insurance premium. Insurance companies will look at how good you are at making payments and how much debt you currently have. Typically, the better your credit score, the lower your insurance premium.
- Claims history – Any claims you’ve made at previous residences will be assessed by your insurance company when determining your premium. The type and frequency of the claims you’ve filed can lead to higher premiums.
There are a few factors about your home that may affect your premiums:
- Replacement value – The value of your home can also influence the cost of your insurance. Typically, the greater the value of your home, the higher your insurance premiums will be.
- Age of property – Older buildings tend to have costlier premiums since the materials they’re built with may be more expensive and harder to replace. For example, if you have stained-glass windows in your home, that could cost more to replace than a standard window since stained-glass windows are far less common.
- Remodeling – Any improvements made to your home will lead to an increase in your premiums since renovations typically increase the value of your home—therefore increasing your home’s replacement costs. Although, repairs made to your roof, electrical or plumbing that increase safety or efficiency may allow you to receive discounts that can reduce your premiums. Always alert your agent about new home remodels to ensure they can be replaced if damaged or destroyed.
If your home is located in a high-risk area, you will commonly pay more for your home insurance. Homes that are considered at a higher risk for damage or loss are those located near coastlines, farther away from response teams (fire or police departments) or are in areas that are more susceptible to natural disasters.
If your home is being used for work purposes, you may need to purchase additional coverage. Most standard home insurance policies will provide some liability coverage and limited protection for business equipment you may keep at your home, but it may not be enough. To ensure you are sufficiently covered, you may choose to purchase additional coverage or add to your home insurance policy.
Attractive nuisances are potentially dangerous objects that could attract people, including children, onto your property. The most common attractive nuisances are pools and trampolines—if you have either on your property, you could pay more for your insurance premium.
Depending on your insurance policy, your dog may be covered under your home insurance policy if they are involved in a liability claim. But, some dog breeds that are marked “aggressive” may have limited coverage or none at all. The most common dog breeds that insurance companies are wary to cover are Rottweilers and pit bulls.
We’re here to help
It’s imperative to have a clear understanding of your policy and how it works to help you recover from a loss. Remember to review your policy regularly to ensure it protects your home thoroughly, and contact us for additional guidance.