Keep your homeowners insurance current with your needs.
The cost of homeownership continues to rise in the United States. Though the continuous increase is a fact, it’s often unclear why most homeowners pay a different premium than the family living next door. Insurance carriers take into account many factors when determining the premium for an individual homeowner. Smart homeowners know what these factors are and use this knowledge to shop around for the best deal and manage to lower the cost.
Age, type, and quality of your home – A new home’s structure is likely to be in better shape than an older home’s. With a solid structure and new and improved systems, the likelihood of fire, electrical, and plumbing problems are reduced.
Location, location, location – Let’s face it, some neighborhoods are more crime-ridden than others, especially in urban areas. If crime is higher in one area than another, then the premium may be higher. Additionally, homes near a fire hydrant and/or fire station could enjoy lower premiums as these factors would help to put out a fire that much quicker.
Risk factors – If you own a swimming pool, hot tub, trampoline, have a guest house or an ‘aggressive’ breed of dog, the risk of filing a liability claim can increase. With a higher risk of injuries, and therefore claims, your premium inflates.
Previous claims – The more claims you have, the higher your perceived risk to insurers. This can not only lead to higher premiums but also the risk your insurer dropping your coverage or not renewing your policy.
Deductible – The general rule of thumb for homeowners insurance policies is that the lower your deductible, the higher your premium. A higher deductible could reduce your premium costs by up to 25 percent – but this does mean a higher out of pocket cost should you need to file a claim.
Riders – Any extra home insurance rides you choose to increase your coverage will make a difference in your premium. Riders such as replacement cost and adding valuable items insurance will better protect your home and belongings, but will cost you a little more every month.
It’s incredibly important to review your insurance coverage on a regular basis so that you can be sure that your protection keeps pace with the cost of your home. While this could lead to higher premiums, it helps you to be more adequately insured and less vulnerable to high out-of-pocket expenses.