A homeowners policy consists of many different elements. Each element of the homeowners policy has a specific rate attached to it. Each of the rates creates portions of the premium which in the end are summed up into the overall policy premium. You may wonder, why does the premium fluctuate year to year. Well, there are a number of different reasons. Many individuals will look at an insurance policy and think of it as their premium based on their insurance history. Unfortunately, that is not the case. Insurance premiums are based on a variety of factors, with some of them out of your control. Two main factors that are out of your control include: company loss ratio (premium paid vs. losses paid) and territorial risk (how often the area succumbs to natural disaster, theft, etc.). When you get a letter in the mail stating that insurance rates for homeowners policies have increased, you should always contact your agent, but it is most likely because of these two factors.
Risk factors that you are in control of are not always easy to control, but they are factors that are based on you as the consumer. People may wonder, why aren't all homeowners insurance policies the same price? Or, why is it that I have the same type of house as my neighbor yet my insurance premium is $300 more? Here is a list of factors that the insurance company rates for you as the individual consumer: Credit History (have you always made on time payments? are you in a lot of debt?), age (insurance premiums generally decrease as you get older), loss history (have you had any losses in the past 5 years?). These factors play a key role in determing how much your homeowners insurance will cost you. These three factors help to determine an insurance score, which is used to provide the insurance company with information on how to rate your insurance premium based on you as the owner of the property.
I'm sure after reading the previous two paragraphs, you are probably ready to know how you can save money on your homeowners insurance. And, while many of you may know some of the discounts, read the following list, you may be missing something.
Homeowners Insurance Discounts
1. Increase your policy deductible
2. Update your roof, plumbing, electric, furnace
3. Install additional safety devices (i.e. burglary system, sprinkler system)
4. Multi-policy discounts (purchase an auto policy or life insurance policy with the same company) from 25%-30% discount with some insurance companies.
5. Have great credit history (Individuals with above average credit scores get a discount)
These are the basic discounts that you will see in every insurance company. So, if you are looking to save, don't hesitate to call your insurance agent and ask them about these discounts. Or, you can contact me, and I will help guide you on your way to a better and less expensive insurance policy.
Read my blog tomorrow as I dig deeper into the homeowners insurance policy to give you details on the most necessary coverages and w
Risk factors that you are in control of are not always easy to control, but they are factors that are based on you as the consumer. People may wonder, why aren't all homeowners insurance policies the same price? Or, why is it that I have the same type of house as my neighbor yet my insurance premium is $300 more? Here is a list of factors that the insurance company rates for you as the individual consumer: Credit History (have you always made on time payments? are you in a lot of debt?), age (insurance premiums generally decrease as you get older), loss history (have you had any losses in the past 5 years?). These factors play a key role in determing how much your homeowners insurance will cost you. These three factors help to determine an insurance score, which is used to provide the insurance company with information on how to rate your insurance premium based on you as the owner of the property.
I'm sure after reading the previous two paragraphs, you are probably ready to know how you can save money on your homeowners insurance. And, while many of you may know some of the discounts, read the following list, you may be missing something.
Homeowners Insurance Discounts
1. Increase your policy deductible
2. Update your roof, plumbing, electric, furnace
3. Install additional safety devices (i.e. burglary system, sprinkler system)
4. Multi-policy discounts (purchase an auto policy or life insurance policy with the same company) from 25%-30% discount with some insurance companies.
5. Have great credit history (Individuals with above average credit scores get a discount)
These are the basic discounts that you will see in every insurance company. So, if you are looking to save, don't hesitate to call your insurance agent and ask them about these discounts. Or, you can contact me, and I will help guide you on your way to a better and less expensive insurance policy.
Read my blog tomorrow as I dig deeper into the homeowners insurance policy to give you details on the most necessary coverages and w
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