Purchasing homeowners insurance can be challenging when you don’t understand how risk factors affect the rates you pay for homeowners insurance. Many individuals are surprised to find that policy rates will go up or down depending on variables they may have never even considered. Some surprising risk factors that can affect your homeowners insurance rates are mentioned below.
The first factor that will affect your homeowners insurance premium is the location of your home. When your home is located in an area that has a high risk of natural disasters, you are going to pay more in insurance fees. In the state of Texas, most residents are paying higher than average homeowners insurance rates because of the high risk of severe weather that exists. Texas experiences hurricanes, tornadoes, hail, severe storms, floods, and other natural disasters on a regular basis. In fact, in just the first six months of 2015, insurance companies sent out almost $2 billion in direct losses to homeowners in Texas.
Just because Texas is a high risk state when it comes to natural disasters, there are certain steps that homeowners can take to lower their homeowners insurance premiums. For example, taking steps to make the home disaster resistant can lower the premium. Some insurance companies may lower the rate when homeowners install shatterproof glass and storm shutters or when they reinforce their roof.
A second surprising variable that affects homeowners insurance rates is the distance between the home and a fire hydrant. If the home is not a located near a fire hydrant, it is at greater risk if a fire occurs. The peace and quiet that a person may enjoy when they move out of town may end up costing them in higher homeowners insurance rates. You may not be able to change the location of your home or have a fire hydrant installed near it, but you can shop around. Take time to compare homeowners insurance rates that are offered by a variety of local companies. This is going to get you the best price.
If your home is more at risk for burglary, you will likely be paying more in homeowners insurance rates. There are at least two things that insurance companies look at when they determine how risky your home is for burglary. First, they look at the neighborhood where you are located. If the crime rates in the area are pretty high, they will likely charge you more for homeowners insurance. Second, if you do not have any home security features installed in your home, you will be paying more in insurance. The best solution to this problem is to install a security system. This can include alarms, cameras, glass breaks and other devices that will protect your home from burglary.
The things that are used for entertainment in your backyard can drastically increase how much you pay in homeowners insurance each year. If you have a pool or a trampoline in your backyard, it is very likely that your rates will go up. You may even need to increase your liability coverage with an umbrella policy. Depending on your circumstances, you may have to ask yourself if it is worth the money in extra homeowners insurance coverage to be able to enjoy a cool dip in the pool on a hot Texas day. You may be able to add protective coverage that will keep rates down by installing a fence around the pool or by covering it. The same applies to a trampoline.
Some of the variables mentioned above may be surprising to you. When you learn more about the things that affect your homeowners insurance rates, you will be able to take steps to start saving money.