If you’ve ever owned an insurance policy, you likely know that an insurance premium is what you pay to your insurer in order to have insurance. The amount is typically a yearly figure, but it can often be paid monthly. The agent who sold you the policy probably quoted you a premium, but you can also find it on your policy’s declaration page.
People can have different home insurance premiums even when they live right next door to one another. This is because insurance premiums are based on a slew of factors, many of which are unique to the homeowner and their home.
When you buy insurance, say homeowners insurance, you usually have to complete an application that asks several questions. The answers to many of these questions help the insurance company decide how risky your home is to insure, whether it can cover that risk, and how much premium to charge.
For example, home insurance companies usually want to know your home’s:
But they also need details about you, such as your birthdate, Social Security number, and insurance history. All together, this information gives the insurance company some insight on the likelihood of you filing an insurance claim. That risk is ultimately what determines your home insurance premium.
Most insurance companies have actuaries review your information and enter it into algorithms to determine your premiums. And to get it, they usually make you fill out long applications.
But when it comes to home insurance applications, we think the fewer questions, the better. Instead, we use technology to comb public records and pull much of the information we need to evaluate your risk. That way, you can apply and get covered quicker and with fewer complications than you would with other insurance companies.
The information we get from public sources is often more accurate than what an applicant might know. In turn, this makes our home insurance premiums more accurate.
Insurance companies may use premiums to:
By investing some of their premiums, insurance companies mitigate costs to policyholders and prepare for catastrophic claims.
Home insurance premiums do periodically go up when you renew your policy, and there are a few reasons why. We’ve listed three common ones below.
There are several ways you may be able to keep home insurance premiums down. For example, you may want to:
Get a quote to see how much you can save on your home insurance premium with Kin. Many of our policyholders found they paid less for their home insurance when they switched to us!