When it comes to home insurance premiums, there are many factors that play a part in deciding how much you’ll need to pay. These include the condition and age of your home, as well as your insurance claim history and credit score.
Different insurance companies assess risk in different ways, making it important to compare insurance quotes to make sure you’re getting the best value.
Here are three key factors that affect your home insurance premiums.
The Replacement Cost Of Your Home
One of the biggest mistakes many homeowners make when getting their homes insured is under-insuring its value. This could translate to not having enough coverage in case of an unfortunate incident, causing you a lot of financial distress.
The replacement cost of your house is a loose estimate of the amount required to build an exact replica of your house, at the very location where it’s currently standing. Many people confuse this figure for the market cost, which is very different, and includes several other factors such as the value of the land.
Arriving At a Deductible Amount
A deductible is a certain amount of money that you need to pay toward a mishap or loss before your insurance company steps in and pays the claim.
The higher the deductible amount, the less you pay in premiums, making this a highly important decision.
According to Insurance Information Institute, the recommended deductible amount for most insurers is $500, at the very least, and that by increasing that to $1,000, you’re likely to save up to 25% on premiums.
Remodeling of any kind is likely to raise the value of your home. This means that you’ll need to update your policy and keep your insurance agent informed of all the improvements made.
This is because it is expensive to remodel any part of the house, and it raises the replacement cost of your house. This translates to higher premiums. But remember, the coverage will be protecting an investment that will appreciate over time.
If you’re looking for a reliable company to consult for home insurance, don’t hesitate to contact us. We’re one of the leading providers of home insurance in Lehighton, Jim Thorpe, Pittston, and Clarks Summit.
We also offer FREE home insurance quotes to help you compare rates with other companies, so you can choose the most affordable option.