Certain factors affect the cost of your home insurance.
When calculating homeowners insurance rates, insurers look at more than just your home’s value. There are a wealth are factors that cause your homeowners insurance premiums to inflate or decrease.
Here are the top 5 influencing factors:
- Age and construction – A new home’s structure is likely to be in better shape than an older home’s. With a stable structure and new and improved systems, the likelihood of fire, electrical, and plumbing problems are reduced.
- Location – Rates for your home may be higher if:
- The home is located in a wildfire, tornado, or other natural disaster-prone area
- The neighborhood or town faces high-crime
- Building costs in the area are high
- There is no fire station within 5 miles
- Risk factors – If you own a swimming pool, hot tub, trampoline, have a guest house or an ‘aggressive’ breed of dog, the risk of filing a liability claim increases. Insurers view these home additions as ‘risky’, therefore, insurance premiums increase.
- Claims history – If you’re a homeowner that has often filed claims, you’ll likely face higher premiums.
- Credit score – The higher a homeowner’s credit score, the lower their risk level. As a result, they are offered cheaper homeowners insurance rates.
When looking for the best homeowners insurance policy, there are some factors that you cannot change (eg. location), and some you can (selling the trampoline). To find the best homeowners insurance coverage to suit your lifestyle and budget, contact North Central Insurance in Elk River, Minnesota today!