Factors that Affect Homeowner Insurance Rates

When shopping for homeowner's insurance, you may come to wonder what it is that causes your rates to be different than others who may live in your same neighborhood and perhaps pay less or more. If your homes are basically the same, why should one homeowner's insurance rate cost more or less than yours? Insurance underwriting is a very long and intensive process that takes in to account more factors about the home and its owner than most people would probably care to hear about. This is because research and statistics have shown over the years that there is much more to determining whether or not a company could lose money on a client than what meets the eye. The specific risk you pose to an insurance company is what determines what your insurance premiums will be and that risk is determined by evaluating many different things about you and your home.

• Your Location: Your state, your county, your neighborhood, and yes, even your location on your block will all play a factor in determining your insurance premiums. Whether you live in the city or country will change your premiums, and of course the weather patterns of the area are going to have a significant impact on your insurance premiums.
• Your Home: Older homes cost more to insure as they are more likely to fall apart and possibly more expensive to repair as well. The expression "they don't make 'em like they used to" comes into play here, as older homes were made with much more solid (now expensive) materials than most newer homes, and repairing or replacing those materials after damage or a fire can get very pricey.
• Your History: If you have filed a claim for homeowner's insurance in the past, you can expect that to impact your current request for cheap homeowner insurance quotes. The circumstances of your prior request may or may not be looked at, but they don't really matter much when it comes to determining that your premiums will be higher.
• Your Family/Age: If you have a large family, your insurance premiums are going to increase to match the size. The more people being insured, naturally the more you increase the risk of a claim being filed. More people also means more wear and tear on a house - which insurance does not cover, but which can lead to accidents or issues of other types that the insurance does cover. Also, the age of the occupants is a consideration. Just as with auto insurance, there is an upside down bell curve for premiums, where the youngest (teenagers) and the oldest drivers pay the most in premiums, while those who are in the middle of their life pay the least, a different but similar type of curve exists for homeowner's insurance as well.
• Your Credit: This is not allowed by state law to be considered by insurance companies in some states, but most do allow it. Statistics have proven that people who have low credit scores are significantly more likely to wind up filing a claim for insurance - any type of insurance - than those whose credit scores are higher. This isn't necessarily an indication of expected honesty, rather the likelihood that those with excellent credit are likely to be wealthier, and likely to handle smaller expenses themselves rather than file a claim for the insurance company to handle it.