While it is possible to own a home without having homeowners insurance, if you finance your home, your lender will usually require you to have it. The purpose of it is to protect both you and them from things like natural disasters, electrical fires and water damage due to faulty plumbing. Many homeowners wonder how much their homeowner’s insurance will cost them. These are some of the factors that are commonly used to figure out the premium that you will need to pay in order to insure your home.
The Home’s Condition
One of the factors that is considered when determining how much you will pay for homeowner’s insurance has to do with the overall condition of your home. In general, it costs more to insure a home that is older. If there is any deterioration, such as your home’s roof not being in good condition, then you usually will have to pay more money versus someone else that owns a newer home. Also, things like upgrades and the type of wiring and plumbing that your home has will play a factor in determine how much it will cost to insure your home.
Where Your Home Is Located
You will find that nearly identical houses can have vastly difference insurance premiums because of where they are each located. If your home is located in an area that experiences extreme weather, such as earthquakes, it can cost more to insure it. The same goes for the type of neighborhood that it’s located in. Homes that are located in areas that experience a lot of crime will often cost more to insure. It’s not uncommon for some individuals to choose a home based on whether or not it’s in an area that will cost less to insure than other similar homes in a different neighborhood.
Optional, Protective Items
If you have certain items in your home, your homeowners insurance cedar lake in may cost less money. This is because that by having these types of items you are considered less of a risk of making a claim. These items include fire extinguishers and smoke detectors and home security systems. All of these items lessen the likelihood of you having to file a claim and for the insurance company, you are seen as less of a risk which allows them to offer you insurance at a cheaper rate.
Your Claim History
Some individuals will have to pay more for homeowner’s insurance based on their claim history. If they’ve filed claims in the past, then they often times will have to pay higher insurance premiums. Unfortunately, there’s not much that the homeowner can do about this as they can’t change their claim history. However, they can try to offset some of these costs by installing protective items in their home to receive a reduced rate or offer to pay their premium in full as opposed to monthly payment so that they can receive a discount.