4 Factors That Influence Your Home Insurance Payments

4 Factors That Influence Your Home Insurance Payments
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    If you’re securing a home mortgage, financial lenders typically require that you buy home insurance prior to officially making the deal.

    The condition of the home and property itself can greatly impact your rates, sometimes making you wish you would have thought about the cost of insurance a bit earlier.

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Therefore, before you even start searching for your dream home, explore the following factors that will inevitably influence your home insurance premiums.

1. Home Characteristics

The age of your home along with the basic structure and materials used to build it influences your insurance rates. Typically speaking, the older the home, the greater the likelihood of eventually having problems and therefore needing repairs, so insurance providers may charge more for coverage.

2. Location

The average insurance provider is going to consider how far away your home is to the nearest fire station or fire hydrant. In general, it could cost you more money if you live in a remote area where a fire truck is going to take significantly longer to reach you. Then again, it’s possible to reduce your premium by simply installing a good home security system from companies like Arpel Security Systems. Not only will this make your home much safer and diminish the potential of an intrusion, it can reassure your insurance provider about the overall safety of your home.

3. Credit History

Similar to a credit score, home insurance rates are based on your personal credit report. How you manage your credit in addition to your payment history are key factors that determine your rates. However, unlike typical credit scores, insurance companies use this score to help them predict whether or not you’re an insurance risk rather than how likely you’ll actually repay your debts.

In fact, insurance providers have discovered that negligent credit behavior is directly associated with a higher degree of insurance risk. But, not everyone agrees. Some states have banned the use of credit-related insurance scores in order to determine insurance rates. If you’re worried about your personal credit influencing your insurance premiums, check with the state you live in.

4. History of Claims

How many insurance claims have you filed in the past? A heavy claims history may indicate you’re more likely to file a claim again. Your behavior implies that you have a trend for filing insurance claims for past events that possibly could have been prevented or for damage that wasn’t actually that serious in nature. Therefore, you may be seen as a costly risk overall.

In the end, it’s up to you to consider each aspect when searching for a new home or a new home insurance policy. Although you may not be able to fully influence the premium that a provider offers you, you can however control these factors to some degree.

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