Insurance is an important aspect of our lives. People should not only consider their health and motor vehicles when it comes to insurance. With the many products in the market, home owners insurance is not excluded from the list. One may never know when disaster would strike or the thief will come. Among the things that make insurance costly or affordable is the premium payable. This amount is always affected by other factors as discussed below;
Insurance and claims history
One of the main things the insurer will look at keenly is one’s insurance and their claims history. Your insurance score is scrutinized at this point. Your score just like the credit score determines whether you will get the cover or not. Having low insurance score may have you looked at like a financial risk. One has to ensure they have a good insurance score by avoiding debts that are defaulted and not having tax lien or bankruptcy on their record.
For one’s claims history, they also affect their decision on whether they will get the policy or not. Claims made and the future claims have a correlation. This is in the sense that if one makes a claim there is a likelihood that they will make future claims. One can have their report of the claims from the relevant authority. The amount claimed is not always of a great significance. The insurer mainly looks at the reason for the claim.
Qualities of your house
The kind of house you have will determine the premium you will pay since the sum insured tends to vary with the kind of house. Different things are looked at when it comes to estimating the sum insured. Some of the factors looked at include the following
The type of structure
This includes the materials that were used for construction. A more permanent structure will have higher premiums when compared to a temporary structure. A house made of stones may have a higher premium than that build from wood.
The age of the house
If a house is old, it means that there will be the need for reconstruction should anything happen to it. This means that more premiums should be paid. Newer homes may need remodeling hence the lower the premiums.
Safety and security features
A home having such may have lower premiums. This means that the exposure to risks is low because the owner has taken initiative to prevent the risk from occurring. On the other hand, a house lacking such features has a great exposure hence the insurance company will most likely have to pay for compensation.
Location of your home
This is also a major factor when it comes to deciding how much insurance premium one is expected to pay. If one lives in an area that is prone to crime or natural disasters such as floods, they are prone to use their insurance hence the higher the premium. The insurance company is also out to ensure that they make a profit. Upon discovering that one lives in such an area then they know that at some point one will need compensation.
