What Factors Can Affect Homeowners Insurance Rates? Image

What Factors Can Affect Homeowners Insurance Rates?

September 8, 2020


When looking to insure your home, it’s only natural that you would search for the very best rates possible, but how do you know what might be affecting those rates and if there is anything you might be able to do to lower them, without compromising on the level of protection it affords you?

If you’re confused as to what is making your homeowners insurance rate so high, the following information might be of use:

What is the primary factor that affects a homeowner’s insurance rate?

According to experts, it’s the simple likelihood of a homeowner filing a claim that directly affects insurance rates, and this likelihood is usually referred to as a risk. Determining just what level of risk a homeowner poses, is often done by the insurer having viewed any past home insurance claims the individual may have made, along with any claims related to that property, and the homeowners credit rating. 

The frequency of any prior claims and their severity, can play a significant role in determining rates, and if there is more than one claim relating to the same issue, such as storm or water damage, then the risk factor is increased tenfold. 

If you want to insure your home but have had multiple claims in the past three to seven years, your insurance premium could skyrocket and put you in a higher pricing tier altogether. There is also the chance that you won’t be eligible for home insurance. 

What other factors can affect your insurance rate?

Some other things that might have a significant impact upon the rate of interest for homeowners insurance, include the neighborhood that your home is in, how high the crime rate is in your area, and the availability of building materials should you need to make any structural repairs, all play their own roles in helping to determine the rate of interest you’re offered on your homeowners insurance. 

Annual premiums may also be adversely affected by other coverage options, such as deductibles, or added riders for wine, jewelry and works of art etc. While the type of building you live in, what it’s made from and how old it is can also be factored in by risk analysts, along with the type of heating servicing the home, proximity to the coast, presence of a swimming pool, security system and much, much more. You might even be surprised to know that if you have a puppy in your home, your rate of insurance could rise, since young animals have been known to wreak havoc and destroy items when left unattended. 

All in all, there are many factors of varying significance that can have an impact upon homeowner’s insurance rates, but talk to your local insurance specialists, and they’ll work out the best rate for you under the circumstances.