September 22nd, 2014 8:04 AM by Jackie A. Graves, President
Homeowner’s insurance: if you’re buying a home, you have to have it to
protect yourself—and your savings—from life’s big surprises. But the insurance
premiums don’t always come cheap.
Your premiums will affect how much you pay for the cost of
homeownership each month, but by how much depends on several
There are some things you can do to keep your costs down without
sacrificing the coverage you need.
1. Coverage Amounts and Deductibles
At a basic level, your coverage amount and deductible will have a big
impact on how much you pay monthly.
Your coverage level is the maximum amount you can use to repair or
replace damage to your home and possessions—and to cover medical expenses after
an accident. The deductible is the amount you pay for damage after making a
claim, before the insurance kicks in.
The higher your deductible, the lower your insurance premium.
To keep your costs low, make sure you aren’t over- or under-insured.
While having less insurance coverage than you need could hurt you in the long
run, having too much will raise your monthly premiums.
Keeping a high deductible will lower your monthly costs, but you’ll have
to pay it upfront before getting assistance if you file a claim.
2. Home Age, Features and Materials
The age of your home,
property features and even building materials can affect your homeowner’s
For example, since older homes tend to develop problems in these areas
more frequently than newer ones:
Some renovations to ward against common problems may keep your insurance
down, but check with your provider first.
Certain features of your home (regardless of its age) can also impact
upon your insurance premiums—like swimming pools and hot
tubs—and can raise your rates, while other features can get you a discount. For
example, adding an alarm system, gated entrances and security fences may
benefit your premiums.
Insurance costs may also be linked to the materials used in the
construction of the property. For example, wood shingles or siding could be
considered a greater risk than those made from other materials, as they can
catch on fire more easily and can contribute to water problems.
Some home insurers use data about which neighborhoods have more claims
than others, and they increase their rates accordingly.
They also often look at the distance of your home from the nearest fire
station and whether the area is prone to earthquakes and flooding (in
which case, the policy may not include coverage without an additional rider and
Consider these factors and their impact on the cost of your homeowner’s
insurance before purchasing your home.
While some states, such as Michigan and Pennsylvania, have laws
prohibiting insurance providers from blacklisting customers due to the breed of
their pet, insurance providers in other areas may still raise your rates—or
deny you all together—if your pet is on their
To combat this, shop around with different insurance companies. Many
“pet-friendly” insurance companies do not deny customers based on their pets
and may offer better rates.
5. Credit Rating
Your credit score can
affect your home insurance premiums.
Often, homeowners with lower credit scores will pay higher insurance premiums.
To avoid the ding, keep your credit scores in check by paying your bills
on time and avoiding high debt accumulation.
While it won’t apply to everyone, other factors can also influence your
Operating a business from your home
Living in an area prone to natural disasters
Owning expensive items that require extra
By: Craig Donofrio | Updated from an earlier version by Ben Apple.
To view the original article click here