Factors that Affect Homeowners Insurance Rates
Have you ever wondered why the premiums for your homeowners insurance cost what they do? There are a wide variety of factors that go into determining what you pay on a monthly basis for your homeowners insurance. Here are a few key factors to consider:
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- The age of your home. The older the home is, the more costly it is to insure. This is because insurance providers generally assume that older homes are in more need of upkeep and repairs or are more susceptible to fires or storm damage, which would make owners of old homes more likely to file claims.
- The type of construction. Is your home made with a sturdy material like brick, or a soft, flammable material like wood? The former will secure you better insurance rates, while the latter means your home is more susceptible to damage.
- The location of the home. If your home is at risk for natural disasters, is in a high-crime area, is not near a fire station or is in an area with high building costs, then you will likely have higher rates for homeowners insurance.
- Your history of claims. If you don’t need to file an insurance claim, then you should avoid doing so. People who file frequent homeowners insurance claims pay higher rates than those who don’t, so if you have only small issues affecting your home, pay to fix them yourself.
- Risk factors located on the property. Examples of risk factors include trampolines, aggressive dogs, swimming pools, guest houses and more. You may even run into some insurers who refuse to deny coverage altogether if these risks exist on your property.
- Your credit score. The better of a credit score you have, the lower of a risk that insurance providers will consider you to be. Therefore, you will have lower premiums on your homeowners insurance.