Home » How Are Homeowners Insurance Rates Calculated? 
May 27, 2024
Devette & Ford Insurance Agency Inc.

How Are Homeowners Insurance Rates Calculated? 

a calculator sitting on top of a table next to a laptop showing how homeowners insurance rates are calculatedHomeownership offers both security and responsibility. As a homeowner, you want to protect your investment, and homeowners insurance is essential financial protection.

Whether you’re a first-time homeowner or looking to optimize your coverage, it can be essential to understand the ins and outs of homeowners insurance rates.

What Factors Influence Homeowners Insurance Rates?

The following factors can influence homeowners insurance rates:

  • Home characteristics—Insurers may consider your home’s size, age and unique elements when calculating policy rates.
  • Location and risk factors—Where you live plays a crucial role. Certain areas are more prone to severe weather, which can affect insurance costs. Nearby environmental risks (e.g., living near Tornado Alley) also influence rates.
  • Credit score and claims history—Insurance companies assess your credit score and claims history. A good credit score often leads to lower premiums. A history of frequent claims may increase your rates or impact coverage availability.
  • Policy deductible— Choosing a higher deductible can reduce your premium but increase your out-of-pocket costs in case of a claim.

It’s also important to note that individual circumstances vary. Talk with your agent for help understanding your home insurance rates and strategies for controlling costs.

Ways to Save on Homeowners Insurance

The following are some ways you may be able to lower your homeowners insurance rate:

  • Bundle insurance policies. Insurance companies frequently offer discounts when you buy more than one type of policy, such as auto, life and home.
  • Install home security systems. Homeowners who take steps to make their homes more secure often receive discounts from insurance companies. These steps may include installing a home security system, smoke detectors or a sprinkler system. These measures reduce the risk of damage to your home, reducing the risk to the insurance company.
  • Maintain a good credit score. Homeowners with good credit scores are often offered lower premiums since they are considered less risky to insure.
  • Review your policy regularly. It’s a good idea to review your policy regularly to help ensure you’re not paying for coverage you don’t need. For example, if you’ve recently paid off your mortgage, you may no longer need as much coverage as you did when you first bought your home.


Homeowners Insurance in Glen Arbor, MI

Contact Devette & Ford Insurance Agency, Inc. to find the best coverage at the most competitive rates.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.


Categories: Blog

Tags: credit score and claims history, home characteristics, homeowners insurance rates, location and risk factors, policy deductible

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