Surprising Factors That Affect Homeowners Insurance Rates

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As a homeowner, buying insurance is one of the most important investments you can make to protect your property. However, did you know that many factors influence your insurance rates? While some of them may seem obvious, others are quite surprising. In this article, we will explore some of the unexpected factors that affect homeowners insurance rates.

Your Credit Score

Many people do not know that their credit score can affect their insurance rates. According to some studies, homeowners who have a better credit score tend to file fewer insurance claims. As such, insurance companies perceive those with a good credit score as a lower risk to insure, thus providing them with better insurance rates.

The Age of Your Home

If you have an older home, it might cost more to insure than a newer home. That is because older homes have a higher probability of having outdated electrical systems, plumbing, and other features that pose a higher risk of causing damage or loss. Additionally, the cost of replacing parts, such as wiring and roof repairs, could be more expensive. Thus, insurance companies may charge more for homes that are over ten years old.

Your Claim History

Your homeowners’ insurance provider will check your claim history before deciding on your insurance rate. A homeowner with a history of filing claims may be perceived as a riskier customer who is more likely to file claims in the future. That increases the chances of your insurance rate going up.

The Presence of Home Security Systems

Installing a home security system can help safeguard your home from theft, fire, and other disasters. As such, having one will reduce the likelihood of a claim, thus you should receive a discount from your insurer.

The Distance from Fire Stations

Homes that are more than five miles from a fire station may be perceived by an insurer as a higher risk for fire damage. The reason is that the response time needed to put out a fire will be longer, and as such, more extensive damage may be caused. As a result, homeowners could pay a higher premium for insurance.

The Condition and Location of the Home

The location and condition of your home influences the insurance rate that you will receive. Once you provide your address, an insurance company will check factors such as the level of crime in your neighborhood, flood zone, and other environmental factors that will affect the house. A home located in areas with high crime rates, at the bottom of a hill that is prone to floods, or where hazards such as fires, storms, or high winds are prevalent, will receive a higher rate.

The Type of Dog You Have

If you have a dog, your homeowners’ insurance rate could increase, depending on the type of dog you own. Many insurance companies perceive certain breeds as high risk for attacking people, resulting in a potential liability claim. Some common breeds that may increase insurance rates include Pit Bulls, Rottweilers, Doberman Pinschers, and German Shepherds.

Conclusion

In summary, there are many factors that affect homeowners’ insurance rates, and not all of them are obvious. A homeowner with a good credit score, newer home, claim-free history, installed security system, and living close to a fire station, can benefit from lower rates. On the other hand, a less desirable location, an older home, poor claim history, and owning a certain breed of dog, can increase your insurance premiums. Understanding the factors that affect your home insurance rate is essential, helping you shop around and compare prices to find the best policy for your home.

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