When it comes to homeowners’ insurance, price is important. But if disaster strikes, it’s even more important to have enough coverage to rebuild your home and replace your belongings. While all homeowners need insurance, the price of policies can vary greatly. Your insurance company calculates your insurance premium based on a variety of factors.
Some of the most important rating factors include the age and reconstruction cost of your home, and your claims history. Other risk-based factors include where your home is located, the distance to the responding fire department, the type of materials used to build your home, and the presence of potential hazards like swimming pools, trampolines, and pets.
Your credit-based insurance score may also play a role in the rating of your homeowners’ policy. Using statistics and predictive models, insurance companies can charge premiums based on the risk of future claims. The lower the risk, the lower the cost. For example, new homes with new electrical systems are less likely to experience a fire than old homes with old electrical systems. As a result, new homes can cost less to insure. While it may seem like you have little control over your insurance costs, there are things you can do to save money.
Some insurance companies offer separate deductibles for certain coverages, like wind and hail damage, that are higher than the standard policy deductible. Carrying higher deductibles can lower your premium but it will also increase your out-of-pocket expenses in the event of a claim. Before choosing this option, you should balance the money you will save in lower premiums with the money you will spend when the claim is settled.
Bundling your auto and homeowners’ coverage is another way to save money. Your independent agent can help determine the amount of insurance you need to repair, rebuild, or replace your home and belongings. Be sure to discuss your coverage with your agent when changes are made – like a room addition or an expensive new necklace.
Many insurance companies offer discounts for safety features such as fire and burglar alarms and whole house generators. How and when you pay your insurance premium is often another pricing consideration.
Protection + Price = Value.
Contact your independent agent to make sure you have the right protection, at the best price, for the right insurance value!