What Impacts Your Homeowners Insurance Premium?

Homeowners insurance is an essential investment to help ensure financial security for you and your family. By understanding the various factors that can influence your insurance costs, you may be able to optimize your coverage and ensure you’re getting the best deal. 

Key Factors That Determine Homeowners Insurance Rates 

Insurance carriers must carefully assess and analyze your personal circumstances and the details of your home when calculating coverage costs. While insurers’ quoting processes may vary in the weight given to various criteria, you can generally expect that the following may be considered:

• Location—Where you live plays a significant role in determining costs. If you’re in an area at greater risk of natural disasters, with higher crime rates or greater cost of living, you should typically expect to pay more for coverage. 

• Structural details—How your home is built can be a significant factor. For example, older homes may often be riskier for carriers to insure, potentially leading to higher costs. On the other hand, residences built with flame-resistant materials or reinforced roofs could lead to lower rates. 

• Estimated rebuild cost—If your home would cost more to rebuild in the event of a total loss, you can generally expect to pay more for coverage, as insurers must raise your premiums to account for the potentially greater payouts. 

• Liability risks—Homeowners insurance typically includes personal liability coverage, which can provide aid if you’re at fault for another party’s losses. If carriers view you as more likely to be liable for accidents or other incidents, such as if you have children or attractive nuisances on your property, you may be quoted higher rates. 

• Claims history—If you’ve filed several claims against your insurance in recent years, insurance companies will likely consider you riskier to insure, thus incurring higher costs. 

• Coverage details—Your coverage limits, deductible and the endorsements you select can all go a long way in determining your rates. For example, if you opt for a higher deductible, you may enjoy lower premiums, but you’ll have to pay more out of pocket when facing losses. 

We’re Here to Help 

Contact FLM Insurance today to learn more or to get a free homeowners insurance quote. 

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.