How insurers set your premium
Many factors determine the premium you pay. Different insurance companies charge different premiums for similar coverage. Getting three or more comparison quotes is worthwhile. Factors that are likely to affect your premiums include:
Home characteristics
- The cost to rebuild your home. This is not the same as the purchase price (which includes the cost of the land). The agent may help you estimate the replacement cost using information about your home and its contents.
- Whether your home is made of brick or wood (the premium usually is lower for brick than for wood)
- The distance from your home to a fire hydrant or fire department
- The age and condition of your home
- The claims history of the home and homes in the area
Cover choices/your history
- The limits, deductibles and other optional endorsements you choose
- Whether you also insure your auto with the same insurance company
- The length of time you are with a company
- Your credit history. See more at: Credit Scoring
- Whether you currently have homeowners insurance
- Your previous homeowners insurance claims history such as fire, theft, or liability
Other
- Having protection devices such as smoke detectors, a burglar alarm, a sprinkler system, deadbolts on doors or security devices for windows
- The types of pets you have (some insurers won't cover you if you own certain breeds of dogs)
- Having a swimming pool or trampoline
- Having a wood furnace or wood stove
- Operating a business from your home
Lowering Premiums
You can do a number of things to qualify for a lower premium:
- Install deadbolt locks on all exterior doors, fire and burglar alarm systems, and adequate outdoor lighting.
- Keep your property well maintained and remove garbage and other hazards that might increase the chance of fires, accidents, or burglaries.
- Don't keep a dog that has a history of biting.
- Repair crumbling sidewalks and dilapidated steps.
- Review your credit record and correct errors.
- Consider increasing your deductible. Make sure you can afford to pay the higher deductible if you have a loss.
- Consider purchasing your home and auto insurance from the same company. You may qualify for a discount.
