Home insurance is an important, and often necessary, part of owning a home. These plans protect your #1 investment and the people who call it home. That’s why it’s important to get the right amount of coverage for your situation.
While you want to protect your loved ones, you also don’t want to pay a fortune to do so. According to a recent report from S&P Global, Virginia has the second-highest average annual premiums at $1,181. For Richmond homeowners, it can be difficult to determine what does or doesn’t raise your insurance premiums.
While there isn’t an exact science, there are a few key factors that affect your home insurance premiums. Here we’ve listed the 10 most common factors to help you reduce your potential risk when shopping around for home insurance.
1. Where You Live
This may seem self-explanatory on the surface, but your home’s location can greatly affect your home insurance premium. Your location can be affected by many different things, like specific climates, common natural disasters, or even average costs in your neighborhood.
These factors can include:
- Frequency of natural disasters
- Proximity to a city
- Safeness of your neighborhood
- Distance from coast
This is why it’s important to seriously consider where you choose to live. It could greatly reduce or increase your premium.
2. Rebuilding Costs
Home insurance is designed to offer relief in the case of an accident or serious event. In the unlikely case that your home is completely demolished, your home insurance can help to cover the rebuilding and repair costs.
Depending on the price of your home, that will determine how much it will cost to rebuild. These prices change depending on the:
- Style of the home
- Type of appliances
- Original size
- Difficulty of construction
Essentially, the more expensive your home is to buy, the more expensive your premium will be in order to repair it.
3. Extra Coverage
On top of covering your home’s repairs, your home insurance policy is also meant to cover three other factors. These include:
- Personal belongings
- Liability against lawsuits and either cost
- Additional living expenses
While it’s a good idea to have coverage for the important things in your life, you don’t want to waste money on something you may never use. Carefully consider what your home insurance policy is covering and how much you actually need in case of an emergency.
4. Your Home’s Condition
The condition and age of your home can greatly affect your insurance policy. This is because a vintage home or one that needs a lot of work can pose significantly more risks. Compared to new construction homes, these older homes are more of a liability for the insurance company.
5. Home Security
Your home’s security is important, not just for keeping your family safe, but showing your insurance provider that you care about keeping your investment safe. By installing security locks, a monitoring system, and even fire alarms, your insurance provider may offer you a discount on your premium.
6. Credit History
Like with all loans and investments, your credit history plays a significant factor in your home insurance premium. In Virginia, insurance providers are allowed to view your credit and insurance score in order to determine your policy.
By paying your insurance bills and credit card bills on time, you can help improve this score and potentially reduce your premium.
7. Additional Coverage Types
Most home insurance policies don’t cover every type of accident. Depending on where you live, you may have to pay for additional coverage. These policies can include:
- Earthquake protection
- Flooding protection
- Hail protection
These additional policies can raise your total insurance costs, so it’s important to determine with the cost of these policies is worth it for your home.
8. Deductible Rates
Your deductible determines how much you pay each month for your insurance policy. The higher your deductible, the less the insurance company has to pay to cover your costs. While there is no guarantee, some insurance providers reduce home insurance premiums if you pay a higher deductible.
This option is worth discussing with your insurance provider.
9. Bundling Insurance
Many insurance providers offer discounts for people who buy multiple types of insurance from them. So if you’re in the market for home, auto, and other types of insurance, it may be wise to consider if one provider can give all that coverage for less.
10. Compare Insurers
You can always find better deals by comparing insurance providers. By doing your research, you can ensure that you’re getting the best coverage for the best price.
When you’re looking for somewhere to start, Sanford Insurance has you covered. Our home insurance policies are specialized for Richmond, VA homes. Contact us to get a quote on your home insurance premium.
Source: https://www.americanexpress.com/en-us/credit-cards/credit-intel/homeowners-insurance-cost/
https://www.coverage.com/insurance/home/factors-that-affect-home-insurance-premiums/