Factors That Do and Don’t Affect the Cost of Homeowners’ Insurance
The value of your home plays a big part in the cost of your homeowners’ insurance, as well as the type and age of your home. But there are other factors that may not affect your premium but may affect how your policy is written (and whether an insurance company will write a policy for you). Here’s a list of what may affect your insurance premium:
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The age of your house.
Newer homes typically have fewer maintenance issues. Insurers may require upgrades to systems such as wiring or plumbing before insuring an older home.
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How much coverage you need.
It probably goes without saying, but the higher the required coverage amount for your home and all its contents, the more costly your premium will be. But there are ways you could help lower your premium, such as a higher deductible or special discounts. (More on those below.)
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Your deductible amounts.
Setting higher deductibles on your policy does mean you’ll pay lower premiums. But you want to make sure you can afford to pay that high deductible in one lump sum should you have to file a claim. (Minimum deductibles apply.)
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Discounts.
A discount is offered for insuring both your home and auto insurance with us. Installing deadbolts and an alarm system will also qualify you for a discount. Length of service and new home discounts may also apply. Ask your Alfa® agent about other discounts that may be available.
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Construction type.
Maybe that third little pig was on to something: Brick houses usually cost less to insure than wood frame houses. It’s because brick is more durable than wood and is more likely to withstand certain natural disasters or other risks.
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Remodeling.
Any remodeling you do in your home will probably increase its value – and you need to have that increased value reflected in your homeowner’s insurance policy. Let your agent know of any remodeling or home improvements and their status.
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Your insurance score.
Insurance companies use an insurance score, which is based on your credit rating, the probability of you filing a claim while under coverage and your claim history. If your insurance score is high enough, you may get a discount on your premium.
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Local fire protection.
Insurance applications ask for your home’s address to determine the fire protection class or rating for your area.
Each company has different underwriting rules and not all insurance providers will view risk the same way. Here are areas that may not affect your premium rate but are still considered when the insurance company is underwriting your risk.
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Attractive nuisances. Got a pool, hot tub or trampoline? Many people think these so-called “attractive nuisances” will increase your home insurance premium but they won’t affect the rate. However, you’ll need additional liability coverage to protect yourself in case somebody gets injured.
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Wood-burning stoves. Contrary to belief, a wood-burning stove will not raise your insurance premiums. However, make sure a licensed contractor installs your stove and it meets code requirements.
All coverages are subject to deductibles and policy limits. This is not an insurance policy. It is intended only to provide a general description of Alfa Insurance® and/or its product lines and services. An actual policy contains the specific details of the coverages, conditions and exclusions.
To understand all the factors that go into determining the cost of your homeowners’ insurance, talk to an Alfa agent today.