THE 3 FACTORS THAT HAVE THE BIGGEST IMPACT ON YOUR HOME INSURANCE

Although your homeowner's insurance may seem like an unnecessary expense at times, it is an invaluable safeguard.
Property and casualty risk research firm ISO -- Verisk Analytics states 5.3 percent of all insured homes made a claim in 2014. In addition, the Insurance Information Institute (III) and SNL Financial reported that the incurred losses for homeowner's insurance in the United States totaled $39.84 billion in 2014. This data indicates that even though only a small percentage of homeowners submit home insurance claims, the overall costs associated with these claims can be substantial.
Clearly, home insurance can make a world of difference for homeowners, but that does not mean you should be forced to break the bank to find the proper coverage.
If you understand the factors that impact your home insurance, you should have no trouble picking up the right coverage at the right price. Ultimately, you'll be able to insure your home against a wide range of risks for a reasonable cost.
Here's a closer look at three factors that have the biggest impact on your home insurance

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1. Your Home's Value
Consider the price of your house as well as the total cost it would take to rebuild your residence as you study home insurance options.
Remember, if your home is damaged or destroyed, you'll want to be insured for the full cost to replace your residence. In many cases, this cost will exceed the price you paid for your home, so you should purchase a policy that guarantees you're fully covered against any damage or destruction.
To determine the replacement cost of your home, get an estimate from a reputable builder who can evaluate your current residence and give you an accurate idea of how much it would cost to replace your house. After a builder's evaluation of your home, you'll be able to insure your residence accordingly.
2. Your Home's Location
Location is everything. From the town or city where you live to the number of fire stations near your house, many factors associated with your home's location can affect your home insurance.
Some of the key factors linked to your home's location that can impact your home insurance include:

• Fire Protection -- Insurers frequently use Public Protection Classification (PPC) grades to measure the fire protection capability of local fire departments.
• Wind Storms -- III points out that many insurers in coastal states along the Atlantic seaboard and Gulf of Mexico provide homeowner's insurance with percentage deductibles for hurricane damage instead of traditional dollar deductibles. This means that some homeowners may end up paying higher deductibles due to wind storm dangers.
• Crime -- Risk is lower for homeowners in low-crime areas. Thus, these homeowners often pay less for home insurance than those who live in high-crime areas.

Performing research about your home's location is paramount. If you spend some time learning about risks related to your home's location, you can make sure your home is adequately insured.
3. Your Home's Condition
The age and condition of your home may affect your homeowners insurance, but it is also important to recognize that the design of your residence may impact your home insurance.
For example, a home that features a custom design with many exterior corners may be more expensive to replace than a residence with a simpler design. Therefore, the price to insure the former may be more expensive than the cost to insure the latter.
Insurance companies also consider what's called "morale hazard" when deciding to offer you coverage or not, which is an increase in the risk of hazards caused by a person's apathy due to having insurance. Because of this, maintaining the condition of your home can make you more attractive to insurers. If you fail to perform regular home maintenance, your insurer may have the right to void your coverage in the event of damage or destruction to your residence.
The aforementioned factors will likely have the biggest impact on your home insurance. Furthermore, many insurers now review your credit score to perform a predictive analysis of your risk levels.
Your credit score is affected by a number of factors, including:

• Payment history
• Credit report inquiries
• New and existing credit accounts

A higher credit score means a lower risk. However, if you pay your bills on time, avoid excessive credit card debt and understand your credit history, you may be able to lower your home insurance costs.
You're entitled to a free copy of your credit report from each of the three major credit reporting bureaus (Equifax, Experian and TransUnion) once a year. Request a copy of your credit report from these bureaus annually and you'll be able to identify any credit report issues that could affect your home insurance.
Lastly, don't forget to work with an insurance agent as you explore your home insurance options. These professionals will help you identify risks and guarantee you can protect your home against loss both now and in the future.

Source: Realty Times