Find out how your home insurance premium is calculated.
Curious about why your insurance premium is different than your neighbor’s rates? It all comes down to how your insurance company evaluates your individual risk factors. Generally speaking, the more risk your home faces, the more expensive your insurance premium will be. Here are some of the most common factors that insurance companies consider when calculating your premium.
Your Location
Your home’s location plays a huge role in how high your premium is. For example, if your home is in a dangerous part of town, your insurance rates will likely be on the higher side. This is because insurance companies believe you are more at risk for vandalism or theft than someone living in a gated community in a safer part of town. Additionally, location also affects your home’s risk for natural disasters. For example, your premium will be higher if if you live right on a fault line on live in the middle of a flood plain.
Your Age and Martial Status
Many insurance companies view younger or new homeowners as riskier to insure. As a result, if you are a young, first-time homeowner, then your premiums will be higher than an older, more established homeowner. Additionally, insurance companies will also take your marital status into account. In their eyes, married homeowners are likely more mature and responsible, making them safer to insure. This means that a single homeowner will most likely have higher rates than a married couple.
Your Lifestyle
Don’t be surprised if your agent starts asking seemingly personal or random questions about your lifestyle. These questions are all part of determining your individual risk factors. For example, your insurance agent might ask about your smoking habits. If you are a smoker, then you will probably have higher rates than a non-smoker. This is because you have an increased risk of fire damage and are therefore more expensive to insure.
These are some of the most common factors that influence your home insurance. If you would like to lower your rates, talk to your insurer and see if there are ways to mitigate your risk factors. For questions about your home insurance, contact Phocus Insurance in Phoenix, Arizona. Our expert team is ready to assist you with all your insurance needs.
