House Insurance Rates
The most important aspect of house insurance for most people is the payment rate. The rate is the amount or premium that you will pay for insurance. Coverage and premiums are the two main components of a quote.
How House Insurance Rates are Determined
The two main factors used to determine home insurance rates are the dollar amount of coverage and the deductible. The dollar amount of coverage is the maximum amount that can be paid out on the policy. In most cases, you will pay a higher rate for a higher dollar amount of coverage.
The deductible is the amount of money you will have to pay on a claim before the policy begins to cover losses. In most cases you can get a lower rate by opting for a higher deductible.
There are many more factors that are used to determine rates. The major factors are the ones that affect the amount of risk an insurance company takes when it insures a home.
The more risk a company takes, the higher the insurance rates will be. This is why insurance is often higher on homes in high-crime neighborhoods.
The two most-used factors in determining risk are the location and type of home. Some types of home are thought to be greater risks than others. This includes homes made of materials more likely to catch fire, such as wood, and homes in areas prone to disasters.
How Homeowners Can Affect House Insurance
There are many ways that homeowners and renters can affect the house insurance rates that they pay.
The main way is to decrease the risk of loss and the chance the insurance will be needed. Many insurance companies will give individuals lower rates if they take precautions against burglary such as installing better locks, stronger doors, or bars on the windows. Other companies will give lower rates to individuals who install fire alarms, smoke detectors, and fire sprinklers.
Another way to reduce home insurance rates is to not insure certain items. Valuables such as jewelry, coins, collectibles, and antiques may require special coverage at a higher rate. Not insuring these items can lower insurance rates.
Not submitting minor claims can also keep rates lower because it shows the insurance company that you are a better risk. Companies will lower the insurance rates when they take less of a risk. This means a person should always try to avoid making small claims on insurance.
Finally, most people can lower their home insurance rate by paying a higher deductible. A person who does this will need to have the funds available to cover smaller losses with his own money, though.
House Insurance Directory