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5 Factors You Didn’t Know Were Affecting Your Home Insurance Rates

 August 7, 2014  /  Comments Off on 5 Factors You Didn’t Know Were Affecting Your Home Insurance Rates

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As with all types of insurance, the premiums you will pay will be dependent on certain risk factors. Homes with higher risk quotients will naturally attract high premiums and vice versa. However, knowing what to look for in new homes you are about to purchase, what things could affect your premiums, and taking the necessary steps to address them can go a long way in helping you secure competitive rates and prices from your insurance company of choice.

5 Factors You Didn't Know Were Affecting Your Home Insurance Rates

Home’s Location

By location, we do not mean its geographical location in the city. We mean where it is positioned in terms of natural disasters. Homes located in established and well-known flood prone and hurricane prone areas will naturally attract higher premiums, if any. This applies to homes located in areas with moderate to frequent natural disaster incidents.

In fact, some insurance firms do not provide any home insurance coverage to some high-risk areas. Properties that are also located along the shores or coastlines, on cliffs and slanted hilltops, and close to areas in California where there are wildfires, are also likely to attract higher premiums. If you live in or within 5-10 miles of these areas, be prepared to spend at least $1500 more on your home insurance coverage annually.

The Age of the Roof

Homes with old roofs are likely to attract higher home insurance rates than those that have been updated to the new ones within the last 10-20 years. If yours has undergone a change recently, then there’s no problem. However, if you have not carried out any renovations or replaced the roof in the last 1-2 decades, your insurance rates will be higher than that of your neighbors who did that recently.

This also applies to more modern homes. Newly built homes do not have to pay more because their roofing is usually newer. In fact, homes with impact resistant roofs or some sort of masonry work done underneath the roof to further strengthen and secure it in hail prone or areas that experience a lot of storms are likely to get a discount on their insurance rates.

Plumbing and Electrical Wiring

These also play a role in determining how low or high your home insurance rates will be. Homes with new plumbing or recently maintained plumbing will not need to pay as much as clients with old or non-maintained plumbing.

Also, make sure that there are no leaky pipes and that your plumbing works excellently well to attract lower prices. Insurance companies worry about plumbing because a bad plumbing can often lead to mold. Moreover, getting rid of mold can be quite expensive. Your electrical system too needs to be upgraded to the new or recent electrical code if the house is older than 20 years.

The Neighborhood

High-risk neighborhoods are those neighborhoods with high crime or burglary incidents and those with frequent claims. No matter how great and secured your house is, if the neighborhood you live in is considered high risk by the insurance companies, chances are that your premiums will be generally higher. Determining your rates however, will determine on a few other variables that you’ll need to discuss with your insurance agent before settling on the final cost.

Home’s Security System

Do you have a standard security system or do you just depend on your keys and locks? Your insurance agent will factor this into your estimates. A house with a more secure and standardized security system –even when in safe or low-risk area-will always attract lower home insurance rates than those without. Moreover, when it is in a high-risk area, it can be the difference between $900 a year and $3,000 a year in premiums.

So, if you have not installed a security system, do so before shopping for your home insurance.

Oscar King is an insurance agent working in the state of Florida, dealing with a wide variety of home owners, most of whom have to deal with higher premiums due to the high risk of natural disaster. To help find the best rates for your needs he highly recommends paying a visit to http://www.insuranceland.org/. For more information about Oscar you can visit his Google+.

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  • Published: 3 years ago on August 7, 2014
  • Last Modified: August 7, 2014 @ 5:06 am
  • Filed Under: Finance, Legal

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