What Factors Affect the Cost of Your Homeowner’s Policy?

Bosworth Insurance in Tyler, Texas, understands that insurance can be overwhelming. With all the different types of insurance – renter’s insurance, homeowner’s policy, medical insurance, health insurance, car/truck insurance, etc. – learning about every aspect can be a daunting task.  

Many things can impact your insurance policy, including rates, deductibles, and what’s covered. In addition, many things can impact your homeowner’s insurance premiums. 

Knowing what can impact your insurance policy premium can help you influence how much you pay in homeowner’s insurance. 

The list of factors includes the home’s location, replacement value, and age. 

There are some things you can’t change regarding your house and the cost of the homeowner’s policy, such as your home’s location. 

However, there are some aspects you can influence, which may help you pay a lower premium. Knowing these factors and controlling what you are able to will make a difference in how much you pay for your insurance premiums. 

Here’s a list of factors that might affect your homeowner’s policy: 

1. Your insurance deductible is the agreed-upon amount you pay to the insurance company. When you make a claim, you pay your deductible toward the loss, and then the insurance company pays the rest of the claim.

If you have a higher deductible, then your premium will be lower. 

Talk to your trusted local insurance company to ensure you’re getting the right deductible-to-premium ratio for your household’s financial needs. They can help you determine what’s best for you and your situation. 

2. Your home’s location is one of the most significant things that affect your homeowner’s policy.

Suppose your home’s location is regularly impacted by natural disasters such as wildfires, hurricanes, or tornadoes. In that case, the risk of insuring your home is larger, which means your payments will be higher. 

Other things insurance companies pay attention to are the crime and break-in rates in your neighborhood, as well as your home’s relative closeness to a fire hydrant. 

 3. A “replacement cost” is the cost it would take to replace your home in the event your home was a total loss. Of course, that’s something no one wants to consider, but being prepared if such a terrible happens could mean all the difference in your life and the lives of your family. 

Making up for the total loss of your home is only possible if you have the correct coverage amount. It can make all the difference in getting your life back after a disaster. 

It’s important to have copies/photocopies of as many household financial records and receipts that may apply to replacement.  

When it comes to your home’s replacement costs, there are multiple things taken into account, such as how many rooms it has, the home’s square footage, how old the home is, its age, and even the structural/architectural style of the home. 

While those are the main three, many other details may be taken into consideration when it comes to your homeowner’s insurance policy: 

• Wood-burning stoves have obvious and inherent risks that might increase your home insurance rates. While aesthetically pleasing, they can also be dangerous as a fire hazard. 

• Especially depending on where you live, owning a breed of dog that’s deemed potentially dangerous might make your insurance rates higher because of the elevated risk of a dog bite lawsuit. 

• It goes without saying that, while fun, swimming pools can also be dangerous. If you have a pool, be prepared to pay more in insurance. 

• Do you know what your credit history looks like? How about your claims history? These are both things your insurance company may look into when it comes to your homeowner’s policy. While you can’t go back and change the past, being aware that these details might be scrutinized could help guide how you make credit and claims decisions. 

• Along with location, how much home security you have in place can impact your premium. In addition, putting home safety measures in place is a good way to lower the chance of a break-in. 

• While you might be excited to open your new at-home business, you should first see how having a business in your home might impact your homeowner’s insurance rates. Much of the rate cost will depend on the type of business and the potential risks associated with it. 

Talking to your trusted local insurance agent can help you determine what insurance policies are right for you. 

However, being informed about your situation ahead of time can help you manage the cost of your homeowner’s policy.