4 Things That Determine Your Home Insurance Rate
As a homeowner, having home insurance is highly important to protect you financially in the case of a disaster, such as theft, hail, or fire. When you first purchase home insurance, you should know what is going to help determine your rate. When you know what determines your rate, you can be prepared for the rates that you receive. Here are four things that you may not know determine your home insurance rate:
- Making a Claim: Making a claim through your home insurance is going to affect your rate. The more claims on your policy, the higher your rate is going to be because your home is going to be considered a higher risk. This is why you should consider the claims that you make carefully. If the damages are less than your deductible, then making a claim is unnecessary since you will have to pay out of pocket anyway and the insurance won't cover any of the costs.
- The Previous Owner's Claims: The previous owner's claim made on their home insurance is also going to affect your rate. Since this is out of your control, it's definitely something to consider whenever you purchase a home. Your real estate agent can determine how many claims have been made in the past. When you consider this before purchasing a home, you can be sure that you can actually afford the costs of owning this specific home. If there have been many claims made in the past, you may not be able to afford the insurance on the home.
- Certain Dog Breeds: Having a dog in your home is something that is desirable for many homeowners. Dog's make great, loyal companions. However, there are some breeds of dogs that are going to increase your rate on your home insurance. This is because of the higher risk of dog bites occurring. If your dog were to bite someone, your home insurance would have to pay for those injuries. Be sure that before you bring a dog home, you know what breeds your home insurance company considers to be high-risk dogs.
- Additional Coverage: Many homeowners have to purchase additional coverage on their home insurance because their basic home insurance won't cover certain things that your home could be at risk for. For example, flood and earthquake damage are usually not included in a regular insurance package; instead, you must purchase additional coverage. Purchasing this additional coverage can be costly, so be sure that before you purchase a home, you know what you are at high risk for and whether or not you can afford to insure against that risk.
When you know these four things that determine your home insurance rate, you know some ways that you can avoid high rates.
Share