Choosing Excellent Insurance Coverage

7 Factors That Impact Your Homeowner's Insurance Premium Costs

When you own a home, you are going to need homeowners insurance. When it comes to obtaining homeowners insurance, it is important to understand the various factors that will impact the cost of your premium.

#1: Age of Your Home

Generally, you are going to have to pay more for insurance on an older home. As your home ages, the plumbing and electrical systems may fail, increasing the chance of a claim. New homes have less of a risk for a claim, which can result in lower insurance costs.

#2: Square Footage

The size of your home impacts your premium rate as well. Generally, it is going to cost more for a larger home because you have more space. That is more space that can get damaged and more space you can fill with personal belongings.

#3: Construction Type

The materials used to make your home may impact your insurance rates as well. Each insurance company has its own system for rating the safety and strength of a home based on the building materials.

For example, if you have wood siding and you live in an area with lots of forest fires, your insurance rates might be higher than someone living in a brick home in the same area, as the risk of damage to the wood siding home is higher than the brick home.

#4: Neighborhood Crime Rate

The crime rate in your neighborhood will impact your rates. If you live in a high-crime area, you are going to pay higher rates, as there is an increased risk that your home could be involved in a crime, which increases the insurance company's risk. Always check the crime rate in the area when purchasing a home.

#5: Roof Type

The roof on your home can impact your insurance coverage. A metal or slate roof, which is designed to last for decades, can lower your insurance costs more than an asphalt roof, which has a shorter lifespan.

Insurance companies take the age of your roof, as well the material of your roof, into consideration when determining your premium rate. If you install a new roof, be sure to inform your insurance company, as it can impact your rates.

#6: Credit Score

Insurance companies look at your credit score to determine how well they think you will take care of your home, and how likely you are to keep up coverage on your home. 

 #7: Claim History

Insurance companies have both an internal and national database they use to keep track of how many claims you have made. Someone who makes frequent claims is seen as a risker investment, which can drive up your costs.

You can help keep your claims low by only filing claims when they exceed your deductible. If you file a claim smaller than your deductible, even if your insurance doesn't pay it, it can still go on your record and impact your premium rates.

To learn more about homeowners insurance, contact a company like Ronald H. Krupa Insurance Agency.