Making Sense of Home Insurance Premiums

Making Sense of Home Insurance Premiums

Your insurance statement comes in the mail and while you may be expecting it to be the same as the previous year, this is not always the case.  There are some well known reasons why your home insurance premium goes up and others that you may not be aware of.  Here are xiz reasons why your insurance policy can change.

Where You Live

There are two factors which use the area you live in to determine if your premium increases.  If you have experienced a lot of natural disasters like tornados, hurricanes, or strong storms your home could be in danger of damages therefore making your premium go up.  The second factor is the cost it would take to rebuild your home if it is destroyed.  When construction costs rise so does your premium.  

Passing Years

Your home will get older which will cause your insurance premium to go up.  The insurance company will consider how old your roof, electric system, and plumbing is when deciding on the cost of our policy.  As these things age the probability of something going wrong with them increases which will increase your premium.

Add Ons

If you built an addition onto your home the square footage of your home increases which therefore increases the construction cost to rebuild your home, causing your premium to go up.  If you have decided to build a treehouse or put in a pool, your premium will go up due to the fact that someone may be injured using these things.  This could cause a lawsuit from the injured visitor and insurance companies want to make sure they are protected.

Getting an Animal

In the last year if you decided to get a certain type of animal it can result in the premium going up.  These are usually wild animals like monkeys or dog breeds, which insurance companies consider more dangerous, like pitbulls.  Insurance companies are concerned that owning these animals could result in an accident happening due to them.

Running Your Business Out of Your Home

If you run your business out of your home it means that the insurance company will have more things to cover in your home like filing cabinets and computers in case of a disaster.  If clients come to your home you will need to get business insurance to protect yourself if they get injured in your home.

Your Credit Score

Some insurance companies are able to look at your credit score depending on the state you live in.  If you have a lower credit score they believe that you are more apt to file a claim which will result in them increasing your insurance premium.

The high price of your home insurance premium can be shocking and overwhelming but it doesn’t mean that it has to be your final price.  You can look into other insurance companies to see what they will charge you.  If you decide to stay with your company or while looking at other companies, ask about discounts or consider increasing your deductible to decrease your premium.

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