What Impacts My Premium?
Your home insurance premium is based on a number of variables that tell insurers about your risk. For example, your location is a major factor in your rates – some regions, like California, may be more prone to wildfires, whereas coastal homes in Florida face hurricane risk. Your neighborhood even says something about your likelihood of experiencing a claim: gated communities, for example, may be less prone to property theft than unsecured neighborhoods.
Here are the most common factors that impact your home insurance costs.
Your Home's Characteristics
Your home's traits are a significant factor in how much your coverage costs – and the types of coverage you may need. For instance, your premium may be impacted by the home's:
- Type of roof
- Square footage
- Other structures on the property (fence, garage, etc.)
All of these components determine how much it would cost to rebuild your home if disaster strikes.
As we mentioned earlier, where you live impacts your homeowners insurance premium. Areas with a history of above-average crime rates may have higher premiums. Similarly, areas with greater exposure to natural disasters such as flooding and hurricanes may also increase rates. By contrast, homes close to a staffed fire station tend to have lower premiums.
The amount you are willing to pay toward a claim will either lower or raise your premiums. Typically, the higher your deductible, the lower your premium will be.
Your Risk Management
Depending on where you live, your premium may change based on your home's security. For example, Kin customers can get a discount for centrally monitored security alarms. Sprinkler systems and automatic water shut off systems may also qualify you for a reduced premium.
Your Claims History
Premiums are influenced by the number of claims you have made in the past. Insurers often offer lower premiums to policyholders with a clean claims history.
Folks with a good insurance score tend to have lower premiums. Your age can also affect your premium – seniors may even qualify for discounts. Likewise, new homeowners may also qualify for discounted rates.
Your Personal Belongings
If you have a lot of valuable property – heirloom jewelry, antiques, artwork, etc. – you may need additional personal property protection to adequately protect your belongings. While it may cost a little extra to schedule these items, it does ensure you are appropriately compensated if they are lost or stolen.
Your Landlord Status
If you rent out your property, you may need additional coverage to address the risks you take on as a landlord. As you might've guessed, the more coverage you need, the more your premium may be.