Home insurance is one of those things that can just seem like an added monthly bill that is completely unnecessary but should there ever be a time when you require that insurance, it could quickly pay for itself many times over. No-one likes to think about emergency situations happening, damage to their home, and other issues that can require some rather costly repairs, but the reality is that life happens.
If you’ve decided it’s time to start looking into homeowners insurance and at least consider some basic coverage, then you are probably curious as to how your rate is determined. The amount you pay for home insurance is actually determined by a number of factors, some of which will be under your control whereas others won’t. Let’s take a closer look.
The Home Itself
Insurance Land, an insurance company located in Florida says the biggest factor in determining your insurance premium is the house itself. Any insurance company is going to look at such things as the type of structure, the size of the home, the age of the home, and even what kind of material has been used to build the home.
Insurance Land also points out that if you happen to have an older home, sometimes your rate can be higher, but that can depend on the building materials used. This is exactly why they offer free quotes, which can be done online so that you can get an idea of what your rate may be.
What is Your Claims History?
Another big determining factor is your claims history. Perhaps you have owned other houses in the past, and maybe you’ve had to make an insurance claim. That will remain in your history and can sometimes act as a red flag for an insurance company. At the very least it can push you into the higher premium category.
If you’ve had a number of claims in the past, it may not only mean you will pay more for insurance, but you could find it difficult to be insured at all.
The Contents of the House
Then you need to consider the contents of your house, your personal belongings, and how that may affect your insurance premium. If you have a lot of expensive collections, electronics, jewelry, designer clothing, etc., then your rate will likely be higher. You may even need to get additional coverage for those specific items.
Where Your Home is Located
Unfortunately, some neighborhoods have higher crime rates, and if you happen to live in one of those areas then you will likely see a hike in your rates. Also, if you happen to live in an area that gets a lot of natural disasters, the rate can increase.
Is There an Alarm System?
One thing that can affect your rate in a positive way is to have an alarm system in the home. This can actually decrease your premium. Alarm systems that can monitor the carbon monoxide level and whether or not there is smoke detected in the home can result in even greater savings.
All of these factors will help to determine your home insurance premium.
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