What Determines Your Homeowners Insurance Rates?

Your homeowners’ insurance rates are based on multiple factors, each one carrying varying degrees of weight. Understanding each of these factors will help you find ways to lower your premium rates while keeping your policy as affordable as possible. If you have a policy in place, you can determine how your premiums are calculated by scheduling a review with your insurance agent. Here are some factors that determine your homeowners’ insurance rate.

The Replacement Cost of Your Home Is Higher than Its Market Value

One of the biggest factors in determining homeowners’ insurance rates is the replacement cost of your home. The cost of replacing your home after a fire or other devastating event will be much higher than its actual market value. This is because the cost of building a new home is higher than ever before. Adequately insuring your home for its replacement cost will ensure you have enough to rebuild. Report any home improvement you make to your insurer, as this can significantly impact your home replacement value.

Effect of Your Credit Rating On Homeowners Insurance

Your credit rating is a valuable tool when it comes to determining your financial worth. It shows your fiscal responsibility. Paying your bills on time and keeping your debt to income ratio within the right range shows insurance carriers how responsible your spending is and how early you are paying your bills.

Your History of Past Claims Can Affect Your Insurance

Having a history of past claims will also affect how your homeowners’ insurance premiums are determined. If you have no claims at all, you will qualify for a much lower rate. Having multiple claims will show that you are a higher-risk person and cause you to have a much higher monthly premium. Avoiding small claims is the best way to keep your premiums low.

How Does the Location of Your House Affect Your Insurance?

The location of your home will also play a significant role in determining your premium amount. A person who lives in a gated community where security is high will pay a much lower premium than someone who lives in a neighborhood with a higher crime rate. Doing your part to keep your neighborhood safe can help over time. Also, those who live in areas prone to disasters may pay more insurance monthly costs.

The Impact of Adding Security Features to Your Home?

Security is always a top priority in your home. Putting up a privacy fence and installing a security system, outside lights, and surveillance cameras (CCTV) will lower your monthly homeowners’ insurance premiums. Home security systems are quite affordable and can be installed in just a few minutes. You also have the option of hiring a third-party monitoring service. Home security systems often come with the option to view your system through an app on your smartphone or computer.

A good homeowners’ insurance policy will provide you with quality coverage. Understanding how your premiums are determined will give you insight into what steps you can take to lower your rates. Call the agents at Duane Weber Insurance to get the answers you need. Our agents are experienced and ready to help you get the policy you need at an affordable rate. Reach out to us today!