Factors that Influence Home Insurance

There are several factors that influence the cost of your homeowners insurance policy. You won’t be able to change or control many of these factors. However, identifying the characteristics you can modify and making the appropriate adjustments can help you keep your rates low. The most common factors that influence your homeowners insurance premium include:

Home’s age and type of construction:

If your home is older, there’s a higher chance there will be problems with major components like plumbing, electrical wiring, and HVAC systems. New homes are less susceptible to these major problems.

Location:

If you live in an area prone to natural disasters, with a relatively high crime rate, or located far from emergency services, expect to pay more for your policy.

Claims History: 

If you file several claims a year, you are more likely to pay a higher premium. 

Risk Factors: If your home has a swimming pool, aggressive dog, trampoline, or other characteristic deemed risky, you’ll likely pay a higher premium. 

Credit Score: Your credit score (whether good, bad, or average) has an impact on the price of your policy.

Deductible:

The level of deductible you choose plays a role in the price of your coverage. If you choose a high deductible, that means you have to pay more out of pocket if an incident does occur. The trade-off is a lower premium. (As a side note, I recommend sticking with a deductible you’re comfortable with. If your home is damaged, coming up with $1,000 is probably manageable. Coming up with $2,500 or $5,000 is probably going to be more difficult for most of us. Remember, your insurance won’t kick in until the deductible is met.)