What Affects Homeowners’ Insurance Prices?
Homeowners’ insurance prices are affected by several factors. When you approach an insurance company their underwriters and actuaries look at dozens of things about the home as well as the policyholders to determine the cost. Below are a few of the main factors.
As far as the home itself one of the main factors is the age of the home. Since older houses tend to have more problems such as electrical, roofing and plumbing troubles then these homes tend to have more claims filed. As such this is one cause for rising premiums.
The location of a house is another factor in the insurance cost. Certain neighborhoods have more claims than others and that can increase your premium as well. Additionally the proximity of your home to a fire station or hydrant can affect your homeowner’s insurance rate.
Your house’s features can also affect your insurance costs. The larger a home, the more coverage needed and so the higher your insurance prices will be. Other features of your home that affect your rate include what type of materials your roof and siding are made of, what kind of amenities your home has (hot tub, swimming pool, burglar alarm, etc.) and even if you are a dog owner.
Then there is the matter of the contents of your home. The higher coverage amount you require, the higher your premiums. If you have expensive items such as art, antiques or jewelry your insurance rates will likely rise.
The final factors affecting your homeowner’s insurance rate are your liability coverage and deductible. Liability coverage is defined as “insurance for what the policyholder is legally obligated to pay because of bodily injury or property damage caused to another person.” And much like any other insurance policy the higher your deductible, the lower your insurance rates and vice versa.