You may wonder why insurance companies charge different premiums to different people. Well, a number of factors are considered before an insurer determines how much you should pay to insure your home. Here are 10 factors that have an impact on how much or how little your premium will be.
Frequency of Risk Occurrence
A good record invites low premiums charged by the insurer. For instance, a homeowner who has filed several claims in the past will be charged higher premiums than a homeowner who has never filed a claim. This is because the insurer looks at the records of the two homeowners and concludes that the former is likely to file another claim.
Risk Factors on Your Property
If you have a swimming pool or large trampoline in your backyard, your homeowner's insurance premium will be higher than average. This is because there is a higher chance of your family or house guests being injured when using these items. Adding a fence around your pool and a safety net around the trampoline might help lower your rates a bit if you must have these features on your property.
Age and Condition of the Home
One of the factors that insurance companies pay attention to is the age of the home that needs insurance. An older home that has not at least been renovated is more expensive to insure than a new house with updated electrical, plumbing, and HVAC systems. Even the building materials might affect your homeowner's insurance premium, since certain options, like wood, are more flammable than brick or concrete.
Distance from a Fire Hydrant
If you have a fire hydrant in your front yard, your homeowner's insurance should be cheaper than if the hydrant were down the street. After all, insurance providers want to reduce the chance of losing your house to flames.
Just as with car insurance, your homeowner's insurance coverage should be cheaper when you get married. The main reason is that statistics show married couples file fewer claims than single people, so your insurer may see you as a more mature and responsible policyholder when you get married. In addition, if you have more than one policy through the same insurer, you can get a multiline discount. Many spouses take advantage of this by combining both of their car insurance policies with their homeowner's insurance, resulting in a decent discount for the household.
Insurers use your credit records to calculate your insurance score. This criterion encompasses a number of factors like your debts, loan, and net monthly salary to calculate your insurance score. After the analyses, those with low insurance scores are charged high premium rates than those with high insurance scores.
Some regions have been rated as high risk areas. This is due to vulnerability to natural disasters, such as earthquakes and floods. Having a home in such areas will no doubt attract high premium charges since your property is more susceptible to damage than most. The same goes for areas with high crime.
Human beings grow in different stages. Every stage has its associated risks. For example, young adults who have just bought their first home might engage in riskier behavior on their property. They might also neglect to care for the house like older, more experienced homeowners might. Such people applying for an insurance policy will be charged high premium rates because of their increased risk.
If you have pets, the possible damage they could do to your home will result in higher premiums. This is especially the case if your pets are large or considered a dangerous or destructive breed. In fact, some insurers simply refuse to cover such animals if they are worried about injuries or deaths occurring on the property due to an aggressive pet.
Coverage and Deductible
Not surprisingly, if you choose the minimum coverage for your house, you will pay less on the premium. In addition, if you opt for a high deductible, your premium will cost less. Adding riders to insure expensive possessions within your home will add to your premium cost, as will choosing a lower deductible. If you have more questions about Battle Creek home insurance premiums or need help finding the best rates, please contact Allen Harmon Insurance at 269-441-5156.