FACTORS THAT INFLUENCE
HOMEOWNER’S INSURANCE
There are several
factors that influence the cost of your homeowner’s insurance policy. Speaking
with you agent and having them point out the coverage's you can modify and add can
keep you protected while still keeping your rates low.
Common factors that influence your homeowner’s insurance premium
include:
Your credit score - Your credit score impacts
the price of your policy.
Your claim history - If
you have filed several claims you are more likely to pay a higher premium. Even though you filed a
claim and the company did not pay out keep in mind that still reflects negatively
on your C.L.U.E. Report. See more at: https://personalreports.lexisnexis.com/fact_act_claims_bundle/landing.jsp
Your deductible – Your choice of deductible plays a role in the price of your policy. When choosing a high
deductible you will pay more out of pocket if a claim is filed. The benefit of
a high deductible is that you are paying a lower premium. Many
insurers are selling homeowners insurance policies with percentage deductibles
for storm damage instead of the traditional dollar value deductibles that are
used for other types of claims such as fire damage and theft.
Your coverage limit - The amount of coverage
you need will play a role in the price of your insurance.
Age and type of construction of your home - If your home is older, there is a higher chance that
there will be problems down the road and the home will need to be repaired. Important structural components like roofing, plumbing,
electrical wiring, and HVAC systems may need to be addressed at some point. Newer
homes are built according to today’s building codes and typically have more
energy efficient components.
Location of your home - You can expect to pay more for your policy if you
live in an area that is prone to natural
disasters, has a relatively high crime rate or is located far from emergency
services.
Risk factors on the property - If you have the following things on your property you are likely
to pay a higher premium: a swimming pool, an aggressive dog, a trampoline or any
other characteristic deemed as risky.
Minimize risks that are in your control to assist in keeping your
premium low. Even though you want to keep your premium low don’t skip out on
the coverage's that are recommended by your agent. Things like flood insurance,
back-up of sewer and sump pump overflow are recommended for a reason.
It is a misconception that any type of damage caused by water is covered
in you insurance policy. This is incorrect. Flood waters, water and sewage that
backups through the drain and an overflowing sump pump are all things that are
excluded from a basic homeowner’s policy. When it comes time to perform mitigation
and make repairs people are often shocked they are not covered by their
insurance for these types of damages. Choosing to keep your premium low by
excluding these additional coverage's is not in your best interest. These coverage's are so important that many insurance agents make you sign a waiver
stating that they were offered to you and you choose not to accept them. The
out of pocket cost to resolve water damage can greatly exceed the minimal fees
that you would pay monthly for these additional coverage's. If you cannot afford
to address water damage in a timely manner then you may have a costly mold loss
on your hands. Not accepting the coverages that are recommended to you is like
flipping a coin. There’s a chance you may not have a loss but the risk you take
by not getting accurate coverage is a lot more costly in the long run.
You can’t predict property damage. No one ever thinks they are going to
have water in their basement or sewage overflowing from their toilet. Rainbow International
services these types of losses every day and homeowners are never prepared for them.
Those that have accurate insurance coverage have less headaches because they
are not having to come out of pocket to pay for restoration services.
Choose the right coverage for your individual needs but do not cut
corners to lower costs.
