How Home Insurance Rates Are Determined
A home is a large investment, and keeping it protected is vital. When you are looking at getting home insurance to protect your home, there are a lot of factors that are considered when determining the rates. Gathered is a list of influences that can affect home insurance rates. Keep them in mind when browsing home insurance policies.
- Rebuilding Costs: The rebuilding cost of your house is a large factor in home insurance rates. This is often different from the purchase price of your home because it considers how much it would cost to rebuild your home if it was destroyed, including debris removal costs, labor costs, and material or building costs.
- Home Materials: The materials that make up your home play a large role in insurance rates as well. Houses built from brick, stone, stucco, and other hard, dry substances usually get lower rates while houses made of wood, which is softer and more flammable, tend to get higher insurance rates.
- Age: The age of your home plays a part too. Older houses often have inferior materials or aspects of the structure that are not up to safety codes, which can hike up your insurance rates.
- Location: If your home is at more risk for certain disasters because of its location, an insurance company might charge you more for insurance because you are at a higher risk. Knowing what risks your location comes with can make it easier to figure out the kind of rates available to you.
- Personal Claim History: If you have established a pattern when it comes to damages and claims, your rates may increase because you have become more risky to insure. Making claims for larger damages rather than smaller easily fixed problems, is a good way to keep your claim history clear, which can keep your insurance rates low.