Your home is likely the largest purchase you will ever make, and accordingly, you should make sure your investment is well-protected. Therefore, you need Homeowners Insurance to protect your home and your Personal Property.
As you shop for the right policy, you will receive quotes that seem inexpensive, quotes that seem within your budget, and quotes that seem extremely high. Reviewing these quotes can be like a part-time job.
To properly understand the array of quotes, you must understand what factors affect your Homeowners Insurance premiums.
What State are you in?
Different states have different requirements for Homeowners Insurance. Your insurance premium is highly dependent on your state’s insurance rules and regulations. Wisconsin’s average Homeowners Insurance premium is around $1,049 per year. However, different areas of Wisconsin may pay a higher premium because the areas could pose a higher risk.
Note: The federal government does not regulate the insurance rates for the country. Each state is responsible for regulating insurance rates in their own state, and letting insurance carriers know what they can, and cannot charge their residence.
What Are Your Risks?
Your “chance” or probability, of damage plays a large part in your premiums. Different areas pose different risks – for instance, some areas have a higher risk of water damage due to their proximity to the ocean or rivers.
Other areas are higher crime areas, which could increase the risk of a home invasion, theft, or other damage to the home. These issues create a higher risk for the insurance company. As a result, could lend to higher rates for those areas.
What is the Condition of Your Home?
The condition of your home contributes to your premiums. You would think an older home may cost more to insure because it could have more problems. However, that is not always the case. The newer your home, the more costly your insurance. A newer home costs more to repair. High-end fixtures and new appliances are much more costly to replace than older, or “builder’s Grade” fixtures.
What Type of Insurance Policy do you Want?
The more features and coverages you include in your insurance, the higher your premiums will be. Certain aspects of your policy are required by your mortgage agreement. However, you may choose to add riders and other coverages to your policy per your preference.
What is Your Credit Score?
If you have Homeowners Insurance, your creditworthiness was a part of the amount of premium you ended up having to pay each month via your escrow account. Your insurance company will see you as a higher risk if you have a history of not paying bills on time. The higher your credit score, the better chance you have at getting lower insurance rates.
What Discounts are Available to you?
You can lower your Homeowners Insurance premiums by taking discounts offered by your insurance company. Some of the discounts insurance companies offer include:
- Bundle Options: When you bundle your homeowners policy with your Car Insurance policy, you may receive a multi-policy discount.
- Home Security: If you have a home security system, your insurance company may provide a discount.
- Claims-Free: Some companies offer a discount for a person who has no claims for a period of time. This time period is typically five years for a home and three years for an auto.
- Paid-in-Full: If you drag out your insurance payments over the year this often means you will pay processing fees and interest. If you pay the premium upfront for the year these fees are can be removed, providing a discount.
Final Thoughts
Homeowners Insurance premiums are based on several pieces of information. Research each policy and company carefully before deciding on the right insurance company for your needs.
To learn more about Homeowners Insurance, contact the agents at Insurance Innovations in Grafton & Thiensville, WI at 262-643-4020. Our licensed professionals will be happy to answer any questions you have.
