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Home insurance rates vary from state to state. For the average Joe, understanding why there is so much difference between the insurance rates in Florida and let’s say New York is not easy. Therefore, it is important that you know about the factors that determine the home insurance premium you have to pay. Not only does this allow you to estimate the possible expense you would have to bear for buying home insurance but you can make certain changes to your home to reduce the amount of the premiums you have to pay.
Location
The location of your home is the first thing the company will look at. There are several areas in the US which have been labeled as high-risk with regards to natural disasters. Home insurance is expensive in areas where the risk of flooding or earthquakes is high. Along with the risk of natural disasters, factors such as the local crime rate are also taken into account.
Residence
The condition your house is in and its age are also important factors the company will look at. They want to assess the risk of damage and older homes are more likely to suffer from damages than new constructions. The quality of plumbing, electrical wiring and the HVAC system in your home will also be inspected.
Replacement Cost
The insurance company will consider the cost of building a new home in the area where you are currently living. There are many insurance companies in Florida which provide coverage only to the amount it would take for you to build a new home similar to yours in the same location.
Risk Factors
There are certain ‘risk factors’ the presence of which on your property will drive up the cost of home insurance. They include trampolines, swimming pools and aggressive dog breeds. Since the risk of injuries to you and your family is higher because of these risk factors, the premium you have to pay will be higher.
These are just some of the factors that determine your home insurance premium. Keeping these in mind will help you determine whether you are getting a fair deal or not.
by Morgan Moran
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