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As a homeowner, you should be aware of the factors that will determine your premium before buying.
Cheap Home Insurance Companies
Every homeowner knows that their home is probably the most expensive asset they own. Property within a home and belongings need to be safeguarded hence the need for homeowners’ insurance.
Home insurance companies have different rates that depend on different factors but are within the stipulated national average.
It is therefore very important that every homeowner protects their liability by finding a cheaper homeowners’ insurance policy provider. It is advisable to find a policy that is cheap and yet offers coverage in various scenarios.
A cheap home insurance company will provide customers with tailored insurance coverage that matches their budget, an easy application process, and coverage in different situations.
How Much is Insurance on a 500k House?
On average, the cost of homeowners insurance should be approximately $1249 per year to $1854 for a home with a dwelling coverage below $300K. the higher the dwelling coverage of our home, the more the home insurance policy costs.
For a home with a dwelling coverage of $500K, the cost of an insurance policy will be higher than the quoted national average. The policy may cost about $3519 per year for a dwelling coverage of $500K which amounts to around $293 every month.
With this dwelling coverage, a home will be rebuilt and replaced in case there are any structural damages.
What Determines the Price of Home Insurance?
There are several factors that an insurer considers when calculating or making an estimate of how much you need for insurance cover for your home.
As a homeowner, you should be aware of the factors that will determine your premium before buying.
The Location of your Home
The rates of insurance policy coverage for your home depending on where your property is located. If the home is located in an area that is prone to risks and disasters that cause property damage, the policy price will be high.
If your home is located in an area that is hit by hurricanes and tornadoes or has very bad weather your homeowner insurance cover will cost more.
Major towns and central areas with high populations also affect the price of a homeowners insurance policy. A more favorable location will also impact positively on the insurance cover amount since your home is at a lower risk of damages.
Coverage Amount of your Property
Your home insurance cost will be determined by the dwelling coverage of the home. The dwelling coverage is an average of the cost that will be incurred to replace your home in case of any damages to the structure leading to a total loss.
If the home insurance covers all damages caused by natural disasters and events such as explosions, fire outbreaks, hail rain, and lightning, you will have to pay enough dwelling coverage that can be used to rebuild your home.
Ensure that you know the exact dwelling coverage for your home before settling for an insurance policy. The chances of this happening may be narrow but with a cheap homeowners insurance cover, you are guaranteed that your home will be rebuilt.
How Old your Home is and its Condition?
Homeowners with very old homes that contain unique and antique features need higher insurance coverage for their homes. Older homes are made of special items and structures which can be very expensive and hard to recreate.
Your policy will be designed depending on the cost of recreating a modified home. The rare features will be replaced with standard home features.
Additionally, an old home does not have the updated codes meaning they will need to be bought up during rebuilding. An older home also has extremely outdated systems and utilities which place it at a higher risk. Just like a damaged or leaking roof means a higher risk of damage hence a higher insurance policy price.
Your Credit History
A good credit score is an important determining factor when purchasing a home insurance cover. Every insurer will want to know a homeowner’s credit score before accepting the risk.
Most insurers prefer clients with lower risk and may consider reducing the rates to a cheaper home insurance for homeowners with good credit scores.
Just like the bank, insurers believe that your credit score determines your ability to make policy payments in time. People with a poor credit history are also more likely to file for claims than those with good credit.
The rate-setting you are created for will therefore depend on your credit score.
Homeowners Marital Status
Homeowners who purchase insurance covers as a married couple get lower insurance policy rates than those who purchase as individuals. This is because insurers believe that married people pose a lower risk.
Married people, therefore, get a homeowners insurance policy at a cheaper cost than single people.
Homeowners Claim History
Before determining the rate of your home premium, an insurer will also do their calculations depending on your claims history. Most insurance companies are looking to make more profit than losses.
They offer lower rates to clients with lower chances of filing claims. Someone with several previous claims is more likely to file future claims.
Your home insurance rates will be affected by your previous claims on the insured property even if it is a new home.
Conclusion
A home is a major investment that needs to be protected at all costs. With a home insurance policy, you are guaranteed that your property and belongings are protected and will be replaced in case of anything.
Homeowners should however know how much they will be expected to pay as a premium. The premium rates do vary between one insurance provider and another and will also be affected by several factors as seen above.
You want to ensure that you are getting a favorable deal on your insurance coverage and that you are not paying more when you could be saving. A good home insurance cover will be made to meet your budget and will be able to cover your home damages under different situations.
Furthermore, avoiding some of the factors and fulfilling others will ensure that you don’t pay higher rates when purchasing your insurance.