What Affects Home Insurance Prices?
Amount of Coverage: The amount of coverage you buy for your house, contents, and personal liability will affect the price you pay.
Local Fire Protection: Your home’s distance from a fire hydrant and the rating of your local fire department are some of the attributes used in determining the public protection class (PPC) of your home. PPC ranges from 1 (superior property fire protection) to 10 (no insurance recognition). Most home insurers will generally rate PPCs 1 – 6 identically while PPCs 7 – 10 are assigned a more adverse rating.
Type of Construction: The construction type of a structure, including the type of roof, may vary according to the unique hazard exposures that may impact a region, city or location. The construction type may affect the price of repairs or rebuilding in the event of a loss. For instance, frame houses usually cost more to insure than brick houses due to their susceptibility to fire peril.
Age of House: New homes may qualify for discounts. Some insurance companies either may not insure very old homes or may offer a limited form of coverage.
Deductible Amount: Your choice of a higher deductible will reduce the price for home insurance. However, you will be responsible for paying the deductible amount in case of a loss or a claim.
Discounts: Some insurers offer lower prices for such things as insuring your home and car with the same company and installing deadbolt locks or alarm systems. Check with your agent or insurer.
Credit Reports: Many insurers use your credit history as a factor in determining what price you will be charged for insurance. The use of credit history varies from insurer to insurer and is not the same as the FICO score used by lenders to make loan decisions.
Claims History: If you file a claim with your insurance company, even if the loss was not your fault, this may contribute to an increase in your home insurance premium. Some insurers forgive the first claim, but you may lose the benefit of any claims-free discount if offered by your insurer.
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