April Hartmann
201-723-3772 (mobile)


The 3 Factors That Have the Biggest Impact on Your Home Insurance

Written By: Ryan Hanley
Friday, September 23, 2016

Although your homeowners insurance may seem like an unnecessary expense at times, it is an invaluable safeguard.

Property and casualty risk research firm ISO -- Verisk Analytics states 5.3 percent of all insured homes made a claim in 2014. In addition, the Insurance Information Institute III and SNL Financial reported that the incurred losses for homeowners insurance in the United States totaled 39.84 billion in 2014. This data indicates that even though only a small percentage of homeowners submit home insurance claims, the overall costs associated with these claims can be substantial.

Clearly, home insurance can make a world of difference for homeowners, but that does not mean you should be forced to break the bank to find the proper coverage.

If you understand the factors that impact your home insurance, you should have no trouble picking up the right coverage at the right price. Ultimately, youll be able to insure your home against a wide range of risks for a reasonable cost.

Heres a closer look at three factors that have the biggest impact on your home insurance.

1. Your Homes Value

Consider the price of your house as well as the total cost it would take to rebuild your residence as you study home insurance options.

Remember, if your home is damaged or destroyed, youll want to be insured for the full cost to replace your residence. In many cases, this cost will exceed the price you paid for your home, so you should purchase a policy that guarantees youre fully covered against any damage or destruction.

To determine the replacement cost of your home, get an estimate from a reputable builder who can evaluate your current residence and give you an accurate idea of how much it would cost to replace your house. After a builders evaluation of your home, youll be able to insure your residence accordingly.

2. Your Homes Location

Location is everything. From the town or city where you live to the number of fire stations near your house, many factors associated with your homes location can affect your home insurance.

Some of the key factors linked to your homes location that can impact your home insurance include:

  • Fire Protection -- Insurers frequently use Public Protection >
  • Wind Storms -- III points out that many insurers in coastal states along the Atlantic seaboard and Gulf of Mexico provide homeowners insurance with percentage deductibles for hurricane damage instead of traditional dollar deductibles. This means that some homeowners may end up paying higher deductibles due to wind storm dangers.
  • Crime -- Risk is lower for homeowners in low-crime areas. Thus, these homeowners often pay less for home insurance than those who live in high-crime areas.

Performing research about your homes location is paramount. If you spend some time learning about risks >

3. Your Homes Condition

The age and condition of your home may affect your homeowners insurance, but it is also important to recognize that the design of your residence may impact your home insurance.

For example, a home that features a custom design with many exterior corners may be more expensive to replace than a residence with a simpler design. Therefore, the price to insure the former may be more expensive than the cost to insure the latter.

Insurance companies also consider whats called "morale hazard" when deciding to offer you coverage or not, which is an increase in the risk of hazards caused by a persons apathy due to having insurance. Because of this, maintaining the condition of your home can make you more attractive to insurers. If you fail to perform regular home maintenance, your insurer may have the right to void your coverage in the event of damage or destruction to your residence.

The aforementioned factors will likely have the biggest impact on your home insurance. Furthermore, many insurers now review your credit score to perform a predictive analysis of your risk levels.

Your credit score is affected by a number of factors, including:

  • Payment history
  • Credit report inquiries
  • New and existing credit accounts

A higher credit score means a lower risk. However, if you pay your bills on time, avoid excessive credit card debt and understand your credit history, you may be able to lower your home insurance costs.

Youre entitled to a free copy of your credit report from each of the three major credit reporting bureaus Equifax, Experian and TransUnion once a year. Request a copy of your credit report from these bureaus annually and youll be able to identify any credit report issues that could affect your home insurance.

Lastly, dont forget to work with an insurance agent as you explore your home insurance options. These professionals will help you identify risks and guarantee you can protect your home against loss both now and in the future.

Ryan Hanley is the Vice President of Marketing at TrustedChoice.com and the Managing Editor of Agency Nation. He is also a speaker, podcaster and author of the Amazon best-seller, "Content Warfare." Ryan has over 12 years of insurance expertise and blogs frequently to help consumers understand complicated insurance topics.





Copyright© 2024 Realty Times®. All Rights Reserved

English Spanish French Russian Italian Portuguese
Search by Map
What is My Home Worth?
Testimonials
Seller Services
Updated: Thursday, March 28, 2024

Copyright ©2024Realty Times®. All Rights Reserved

Welcome to the Luxury on the Hudson Blog
Welcome to the Luxury on the Hudson Blog. We hope you will find the contents of the blog...

Recieve Email Alerts
Client Login