They assess risks to review how likely it is you will make a claim. Listed below, are seven factors which can affect the cost of your home insurance premium.
Based on your postal code, insurers can monitor past claims made in your neighbourhood, and use the information to judge whether they need to adjust premiums. For instance, if you live in an area with a high crime rate, the higher the cost.
2. Replacement cost
The size, configuration, and contents of your home can surely affect the price of your insurance. The larger your home, and the more valuables you have; the more they will cost to replace. Replacement costs also include the obligatory amount to rebuild or repair your home based on the square footage and structure if in the event of total loss. Be sure to let your insurance company know if any upgrades have been made to your home, as this can alter your home’s replacement cost.
3. Age of roof
An updated roof will help lower your chances of making a claim and will protect your home from severe weather damage. It’s important to maintain the infrastructure of your household as homes age with time. Updating your roof is one of the most important home improvement projects you can make.
The type of electrical wiring running through your house can affect your premium. Residential homes built in the early 1900s to 1940s will most likely have knob and tube wiring which can increase the chance of a fire. Having this type of wiring removed from your home will help lower your premium. It’s also a good idea to have circuit breakers rather than fuses in your home as fuses pose a safety risk.
Updating your home’s heating system or switching to more environmentally-friendly technology can affect your insurance rate. Wood stoves are also a safety concern as they can increase the risk of a house fire and carbon monoxide poisoning if they are not accurately installed and preserved. Before buying or renting a home with a wood stove, contact your insurer to see if they need to be inspected.
6. Proximity to fire hydrant/fire station
Insurance companies will look at how far your house is from a fire hydrant or fire station. It’s beneficial to live near a fire hydrant or fire station to better save your home in the event of a fire. If you live in a rural area, it will influence the cost of your home insurance. You can help reduce your home premium by installing a fire alarm system, smoke detector, and carbon monoxide detector.
7. Personal claims history
Past claims filed from your previous home will possibly affect your premium. They can often predict your future claims activity. The cost of a past claim may be less important than the cause of the claim.
Different insurance companies offer different home premium rates. These factors address the importance of shopping for home insurance. Get a quote from one of our Desjardins Insurance licensed insurance advisors and find out what type of coverage is best for you.