Homeowner’s insurance is a necessity to protect yourself and your investment in the event that something goes wrong. Home insurance premiums can be extremely costly, and many people are completely unaware of the factors that could be raising their premium costs. Understanding the factors that can contribute to the price of home insurance premiums can help you keep costs down, without sacrificing coverage for you and your family.
Deductibles and Coverage Level
These two factors alone can have a major impact on what your monthly insurance payments will be. The coverage level you have is the maximum amount you can use to make repairs on damage on your home after an accident. Your deductible is the amount you will have to pay for damages after making a claim, before your insurance covers the remainder of the cost.
Basically, the higher your deductible is, the lower your insurance premium will be.
One way to keep costs down is to make sure you have the right amount of coverage, without being under or over-insured. This is sometimes tricky to get perfect: less coverage could hurt you if a major disaster strikes, while having too much insurance will raise your monthly premium. Maintaining a high deductible will lower your monthly costs, but keep in mind that you’ll have to pay more money upfront before getting your insurance to cover the rest when you make a claim.
The Age, Materials, and Features of Your Home
These factors will vary from person to person, but they can all contribute to the cost of your premiums.
An older home is more likely to develop problems with wiring, plumbing, roofing, and foundation. Making some renovations to these areas could help keep your insurance down, but make sure to check with your provider first. You don’t want to make unnecessary renovations only to have your premiums remain the same.
The materials used in your home’s construction also play a role in the cost of your premiums. Some materials, like wood shingles or siding, may be considered a greater risk to disasters like fires and water damage, and raise your monthly costs. Check with your provider to see if updating these materials to lower-risk equivalents will lower your premiums.
Your home could also include features that will affect the cost of your premiums. Potential hazards, like pools or fireplaces, can raise the cost of your premiums. There are also features you can add that could lower the costs, like alarm systems or security gates.
The Location of Your Home
Some insurance providers look at data about where your home is located when determining insurance premium costs. For example, if the neighborhood you live in has more claims filed than other surrounding neighborhoods, providers may adjust their rates accordingly.
There are many other location factors that can influence your premium costs, like your home’s distance from the nearest fire station, and the area’s likelihood of earthquakes or floods.
Typically, homeowners with higher credit scores will pay lower premium costs than homeowners with lower scores.
Raising a credit score isn’t the easiest feat in the world, but it’s important to keep in mind that your credit score could play a major role in determining your premiums.
If you’re considering buying a home in Encinitas, but want to ensure you get the best premiums for your home insurance, I’m here to assist you. As the #1 realtor in Encinitas, I can help you at every stage of the home-buying process, including helping you determine the homeowner’s insurance that’s right for you.