When you are shopping around for a homeowners' insurance policy, you might be wondering exactly where the rates are coming from. It helps to know what factors affect the insurance rate to help you choose the right policy and know what to expect.
The Type of House You Have
One of the top things that can affect the rate of your homeowner's insurance has to do with the type of house you have. First of all, the insurance company will ask about how old your house is. If you have an older home, it might cost more to insure since it is more likely to experience structural or plumbing issues. They might even require you to update the plumbing, electrical, or roofing system before they will insure you. The insurance company might also ask about the type of construction, as this can change how much it would cost to repair. Some types of construction, such as brick, often cost more to insure than other materials.
Proximity of the Local Fire Department
You may also notice that you get a discount on your home insurance if you live close to the local fire department. If you are within a close proximity, it won't take long for them to reach you if there is a fire. This reduces the total amount of damage to your home, and reduces how much the insurance company needs to pay for the repairs. However, if you live far from the fire department or from a fire hydrant, expect to pay a little more for fire coverage under your home insurance policy.
Local Crime Statistics
If you live somewhere that tends to get a high amount of crime, such as a downtown city or urban area, you might be paying a little more for insurance. You have a higher risk of thefts or vandalism of your home, therefore you need to pay more for insurance coverage. If you live in a high-crime area, you might be able to reduce your homeowner's insurance rate by getting a home security system. The better the security is, the more of a discount you can expect to get.
There is also some personal information the insurance company will use to determine your insurance rate. For example, if you and your spouse have low credit scores, expect to pay a down payment and possibly a higher monthly premium as well. You are at risk of missing payments to the insurance company, therefore you will need to pay more due to this high risk. If you have a history of frequent homeowners' insurance claims, that is another reason to have a higher insurance rate.
To learn more, contact an insurance agency like Collins Advantage Insurance Agency.