Factors the Effect Your Premium

There are several factors that can affect the cost of your homeowners insurance premium. Some of these factors are: type of construction, age of home, location, deductible, dollar amount of coverage, additional endorsements selected and underwriting guidelines. Having protective devices such as dead bolt locks, fire extinguishers, burglar, smoke and fire alarm systems will help reduce your insurance premium.

TYPE OF CONSTRUCTION Your home’s ability to withstand or minimize loss due to fire and other perils may have an impact on your insurance premium. Frame houses usually cost more to insure than brick houses.

AGE OF HOME New homes may qualify for discounts with some insurers. These discounts result in a lower insurance premium. Additionally, some companies may not insure very old homes or offer a limited form of coverage.

LOCATION The location of your dwelling affects your insurance premium. Urban areas tend to experience higher crime rates and rural areas typically have less resources for fire protection. Some areas are more susceptible to specific perils, such as windstorm, earthquakes and mine subsidence. The distance of your home from a fire hydrant and the quality of your local fire department determine your fire protection class. Since fire and smoke damage cause millions of dollars in losses each year, the fire-fighting capability of a community such as water supply, building codes, your fire department’s equipment and the quality of your local fire department is taken into account in determining the insurance rate. Your city is assigned a fire protection class and it is used by insurance companies to rate policies. Normally these protection classes range from 1 to 10 with Class 1 having the lowest insurance rates and Class 10 the highest. Classification depends on the: size and the physical characteristics of the municipality or governmental entity; size of the fire department and its personnel, training and equipment; available water supply and pressure; and other recognized fire rating standards.

DEDUCTIBLES AND THE AMOUNT OF COVERAGE All homeowners policies carry a deductible which applies to most property losses. A deductible is the amount you must pay per claim or accident before the insurance company will begin paying. The deductible does not apply to liability coverages (Coverages E and F). Deductibles are fixed amounts specified in the policy. You may have the option of selecting among verious deductibles. higher deductibles lower your insurance premium. You may also select a deductible higher than the standard $250 deductible; this will result in a lower insurance premium. Consult your agent for additional details.

DOLLAR AMOUNT OF COVERAGE The amount of coverage you buy for your house, contents and personal liability will affect the price you pay.

ENDORSEMENTS Additional coverage may be purchased under your homeowners policy by endorsing the policy. Typical endorsements provide coverage for replacement cost coverage on the dwelling and contents, inflation guard protection, etc. Endorsements such as these normally cause an increase in the insurance premium. Some endorsements are added to the policy to evidence the presence of certain features in the dwelling. Normally these features pertain to protective devices such as burglar alarms, smoke detectors, etc. Endorsements in this category normally entitle the policy to a credit which causes a decrease in insurance premium