Home insurance is one of the best ways to protect your home and belongings from theft or damage. Home insurance can cover damage, theft of personal possessions, accidental damage you could cause to another’s property (i.e., fire), and injuries to visitors while on your property.
Choosing the best home insurance policy requires careful consideration, and many people aren’t aware of all the factors that affect their rates. The cost of homeowner’s insurance in Albuquerque is usually based on the cost of replacing your home and any additional endorsements you attach to your policy. Here are 6 factors that can have a big impact on your home insurance rates.
1.Location
Your house’s location is the number one factor influencing your rates. If your home is located in an area with a high risk of natural disasters like wildfires, mudslides, earthquakes, hurricanes, or tornadoes, be prepared to pay significantly higher premiums.
Home insurance policies generally cover wind or hail damage, excluding items such as antennas or satellite dishes. The interior of your home is usually only covered if the unthinkable happens – a storm blasts through your exterior. Some policies allow for lower rates via installing sounder windows or storm doors. But don’t look for many insurance policies to cover damage caused by flooding or earthquakes. This kind of coverage may be offered for purchase only as an add-on to your policy.
Your neighborhood’s crime rate is also a major factor. In some cases, you may be able to add safety features like alarms, access deterrents, etc., but don’t count on being able to invest in safety features to overcome higher premiums.
2.Age & Type of Construction
New homes mean new utilities and good infrastructure conforming to the newest codes and, therfore, lower premiums. Older homes with built-in features may mean difficulty in accessing and replacing them. Replacement may include the cost of access and debris removal. If you purchase an older house with a history of insurance claims, be ready for higher rates. Generally speaking, homes constructed with robust, fire-resistant materials like brick, concrete, or stone are less expensive to insure than homes built with soft, flammable materials like wood.
3.Roofing, Plumbing, & Wiring
It should come as no surprise that insurance companies are reluctant to insure houses with old roofs made of soft materials. Soft, porous materials tend to hold in moisture which can lead to algae growth. This, in turn, leads to premature aging and rotting.
Softer, thinner piping is a higher claim risk. The older the pipes, the higher your premiums, due to the likelihood of cracking and leaking. Most insurance companies are critical of water claims because they often lead to mold damage – potentially, a very extensive and expensive repair.
Wiring is also critical to premiums. Older types of wiring, like knob-and-tube or aluminum, carry a higher risk of fire. Some insurance companies require a safety inspection to ensure your home doesn’t have this kind of wiring. If it does, they might demand you replace it.
4.Water Sources
You know that the closer you live to a hydrant or fire station, the higher the chance of saving your property in case of fire. Premiums will increase with distance. Your rates could also vary depending on whether your community has a professional or volunteer fire service.
5.Pool
A swimming pool will increase your home insurance rates, since it introduces the risks of drowning and injuries. You may have to increase your liability coverage with an umbrella policy. And some insurance companies may not cover you at all.
6.Dogs
Your dog may be your best friend, but he may also cause you problems when shopping for home insurance. Larger breeds deemed aggressive can boost your rates significantly – particularly, pit bulls and dobermans. Obviously, biting and maiming are typical homeowner’s insurance liability claims. One such claim and you may be dropped. However, if you can prove that your dog is well trained and protects your home, you’ll obviously reduce the likelihood of injuries and claims.
All in all, there are many factors that influence your home insurance rates, just as there are quite a few insurance carriers and policies. It’s important to have your home insured, but remember, home insurance is a continuous contractual obligation. You should maintain an updated and backed-up computer file of all your home amenities. And lastly, don’t be afraid to ask your insurance company how new upgrades or additions will affect your premiums.
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