Calculating Home Insurance Quotes

There are many different factors that insurance companies use to help determine your home insurance rates. Understanding what these factors are and how they are used to calculate your rates will help you make more informed decisions and secure the best deals possible on your home insurance.

The 9 Most Important Rating Factors

We’ve identified the 9 most important factors used to determine home insurance rates:

(1.) Basic Description of Your Home 

(2.) Geographical Location of Your Home

(3.) Distance from the Nearest Fire Department and Hydrant

(4.) Home Upgrades in the Last Few Years 

(5.) Total Square Footage

(6.) Credit History & Insurance Score

(7.) Security Devices and Alarm Systems

(8.) Prior Loss & Claims History

(9.) Type of Pets and Recreational Equipment

Basic Description of Your Home

The most important factors used to calculate your home insurance rates are the basic details about your home, like your home’s age and condition, how much its currently worth today, and what construction materials were originally used to build it. Its a good idea to know this basic information about your home to better prepare yourself to compare rates.

Geographical Location of Your Home

The geographical location of your home is one of the most important factors used to determine your price because it helps insurance companies predict what type of weather patterns may affect your home. If you live in a region prone to natural disasters like floods, tornadoes or hurricanes, you are most likely paying a lot more for this increased risk.

Distance from the Nearest Fire Dept. or Hydrant

The distance between your home and the nearest fire department is also used to help determine home insurance rates because insurance companies want to make sure that if a fire does break out in your home, your local fire department is located close enough and well-equipped to respond quickly.

Insurance companies look at how your local fire department is rated using the Fire Suppression Rating Schedule (FSRS). The Fire Suppression Rating Schedule (FSRS) is used by insurers to review the fire-fighting capabilities of individual communities. The schedule measures the major elements of a community’s fire-suppression system and develops a numerical grading called a Public Protection Classification (PPC).

Most home insurance companies require that your home to be located within 5 miles of your local fire department station and 1,000 feet from the nearest fire hydrant.

Upgrades to Wiring, Plumbing, and Heating Systems

Home insurance companies also determine the age and condition of your home’s wiring, plumbing and heating systems and will ask if you have made any upgrades recently. Upgrading your home’s wiring, plumbing, and heating systems will help improve your home’s overall safety. If you’ve made home improvements recently, you could be qualified for much lower rates, so its a good idea to compare home insurance prices after upgrading.

Prior Loss & Claims History

Your home insurance loss and claims history in the past few years is important in determining your home insurance rate because it helps insurance companies calculate the likelihood that you will file a claim again in the future. Insurance companies want to know if you have filed any claims in the last several years, how much the total amount paid out in losses was, and if you have had a lapse in coverage.

Type of Pets and Recreational Equipment

Home insurance companies will also ask if you have any pets, swimming pools, or trampolines on your property. Owning certain breeds of dogs or recreational equipment could increase your rate and may even prevent you from being eligible for coverage.

Click the following links to read more information on how your Dog, trampoline, or swimming pool could be affecting your home insurance rate.

Smart Ways to Save Money

If you’re looking to lower the cost of your home insurance, there are many easy and affordable home improvement options available. The following simple precautions will not only help make your home a safer place to live, they’ll also save you money in the process:

Minimize the Risk of Fire

Here’s how you can better protect your home and also qualify for additional home insurance discounts just by taking a few simple fire prevention precautions:

• Install smoke detectors throughout your home, especially in key areas such as your kitchen, laundry room and near the bedrooms – this will qualify you for extra discounts.

• You may receive a credit for keeping a fire extinguisher on hand near your kitchen, garage, or fireplace. Make sure everyone in your household knows how to locate and use the fire extinguisher.

• If your home’s electrical wiring is more than 30 years old, you should consider upgrading it. Having upgraded electrical wiring also qualifies you for additional credits and discounts on your policy.

• If you’re not a smoker, you may be overpaying for home insurance. Insurance companies typically offer discounts for home owners who don’t have any smokers in their households, since cigarettes are responsible for so many fires each year. Request home insurance quotes today to find out how much you save just by not smoking.

Burglar-Proof Your Home

Reducing the chance that your home will be burglarized will not only help to protect your family and your belongings, it will also reduce your home insurance premium. By putting the following simple security measures in place, you can earn significant discounts:

• Installing a home security system or alarm in your house helps discourage potential burglars and will also automatically notify authorities in the event of a break-in. Most insurance companies offer a 15-20% discount on your policy if you have a security system installed.

• Test your doors and windows to make sure that all locks work properly and there are no obvious gaps or weak points.

• Other easy and affordable ways to qualify for discounts include: install deadbolt locks on all doors, place special locks on all ground floor windows, and set timers to turn your indoor and outdoor lighting on and off when you’re not at home.

Weather-Proof Your Home

Preparing your home for winter weather can save you money on insurance by minimizing the risk of cold weather-related damages.

• Take time to inspect your roof before the winter season starts. Look for things like loose shingles, gutters, downspouts, and other parts of your roof that could become severely damaged from the weight of heavy snow or ice.

• Before the temperature turns cold, wrap any water pipes that are located just inside your exterior walls with insulation to prevent them from freezing. Add weather stripping and caulking to windows to prevent cold air from entering your home.

• If you use a fireplace to heat your home in the winter, have a professional inspect it for potential damage and properly clean out your chimney. This will make sure that everything is working properly and will help prevent a chimney-related fire.

Ways of paying for your Auto Insurance

Paying Your Bill in Full

If you are financially able to pay your entire premium in full, it is probably the easiest and most convenient way to pay for your auto insurance policy. Most companies will give you a discount for paying in full, plus you’ll avoid the possibility of getting canceled for non-payment and having to pay any monthly installment or service fees.

Monthly Installments

If you would rather pay for your auto insurance policy in monthly installments, you have multiple options to choose from. Remember, most insurance companies require a down payment to start the policy, which can range between 10% to 30% of the entire policy premium. You can then choose to pay off the remaining balance by making payments by mail, online, over the phone, or you can enroll in an automatic payment plan.

Automatic Payment Plans

Setting up an automatic monthly payment plan is one of the most convenient ways to make payments on your policy. Many companies will even give you a discount for enrolling in an EFT (electronic funds transfer) payment plan, plus you avoid the risk of being canceled for forgetting to make a payment or having to pay any service fees. Automatic payment plans are safe, secure, efficient, and better for the planet because they are totally paperless.

Take care of your insurance now, so you don't have to worry later

Optional Homeowners Insurance Coverages You May Want to Ad:

Extended Replacement Cost

Extended Replacement Cost coverage provides coverage in addition to the coverage automatically included in the standard policy and is generally limited to 20 or 25% of the home’s value.

Contents Replacement Cost

This line of coverage is typically added to each homeowners policy so that a person’s contents will be covered on a replacement cost basis instead of an actual cash value basis.

Inflation Guard Endorsement

This endorsement provides coverage to protect the policyholder against inflation.  If the replacement cost of a home is steadily increasing with inflation, the policy amounts must also be increased to maintain coverage of at least 80% or higher.

If you purchase a policy today that would cover at least 80% of your home replacement cost, that amount may not be enough to cover it in the future due to inflation.  To keep up with inflation, this endorsement allows the insurance company to automatically increase the policy’s limit throughout the policy period and upon each policy  renewal by a pre-determined percentage.

Scheduled Personal Property Endorsement

The Scheduled Personal Property Endorsement or personal article floater covers valuable possessions such as fine art, jewelry, antiques, collectables, silverware, musical instruments and other high value items that may exceed the amount covered by the standard policy.

To make sure these high value items will be covered by your policy, they must be itemized and specifically listed under the Scheduled Personal Property Endorsement form.

Secondary Premises & Liability Coverage

Under the Secondary Premises & Liability Coverage endorsement, homeowners coverage may be applied to another property such as a vacation home.  Secondary residences are not typically covered by the same homeowners policy that covers your primary residence.

Watercraft Endorsement

The watercraft endorsement provides personal liability and medical expense coverage to watercraft such as jet skis, yachts, small sailboats, and outboard motor boats.

Identity Theft Protection Endorsement

This endorsement provides coverage for losses due to identity theft.

Earthquake Insurance

Standard homeowners policies do not not cover damage as a result of an earthquake.  For an additional premium, the earthquake coverage endorsement may be added to a homeowners policy and provides coverage for earthquake damage with a special deductible that applies to each separate line of coverage.