Factors that Affect Your Home Insurance Premium

Factors that Affect Your Home Insurance Premium

Learn how your personal circumstances affect how your home insurance premium is calculated.

When you’re trying to get insurance for your home, it may seem like your agent is asking some strange questions.  However, these questions are all part of the insurance premium calculation process.  Typically, your rates are a reflection of your individual risk factors; the more risks you face, the higher your rates.  Curious to know what insurance companies see as risks?  Here are a few of the factors that might affect your home insurance premium.

1) Age

Unfortunately for younger or first-time homeowners, insurance companies view younger homeowners as riskier to insure.  This means that a young, first-time homeowner should expect higher rates than an older, more established homeowner.

2) Location

Your home’s location can also affect your insurance premium.  For instance, if you live right on a fault line or in the midst of a flood plain, then your rates will reflect this risky location.  Additionally, if your home is in a dangerous neighborhood, then your rates will reflect your home’s increased risk of vandalism and burglary.

3) Pets

Insurance companies view your pets in relation to the potential damage they could do to your home.  This means that pet owners generally have higher rates than non-pet owners.  To make matter worse, if your dog is a breed considered “dangerous,” some insurance companies may refuse to insure you at all, so be prepared for this possibility.

4) Spa or Pool

If you have a spa or pool in your backyard, you should expect to have higher premiums than a homeowner who doesn’t have these amenities.  Because spas and pools increase the chances of an accident on your property, your rates will reflect this risk.

These are just a couple of the factors that insurance companies take into account when they’re calculating your home insurance premium.  Once you know which risk factors affect your rates, you can work to minimize your risk and potentially lower your premium.  To learn more about the factors that affect your home insurance rates or to simply find the best coverage to fit your budget, contact the professionals at Kurt Rolf Insurance Agency.  Our dedicated team serves your insurance needs in Minnesota, Wisconsin, Florida, South Dakota, and Arizona.