Your home insurance policy is essential. The right homeowner's insurance policy will keep you protected in the event of a natural disaster, burglary, or even an accident that occurs on your property. When it comes to your policy, striking a balance between affordability and ample coverage is vital. The average homeowner's insurance premium amounts to a few thousand dollars per year. However, rates can vary significantly depending on various factors. Here are three things that can have an impact on the cost of your home insurance.
The Type Of Coverage You Choose
One thing that will impact the cost of your homeowner's insurance is whether you choose a policy that offers actual cash value reimbursement or replacement cost value reimbursement. There may not seem like much of a difference between the two, but it can make a significant difference. With actual cash value reimbursement, you are reimbursed for the current value of the item, with depreciation factored. However, with a policy that offers replacement cost value, you are compensated for how much it will cost to replace. Upgrading to replacement cost coverage will typically add around $100 per year to your premium, but is usually a smart decision.
Your Deductible
Your deductible is the amount you pay before your insurance starts to pay on a claim. What you may not know is that your deductible can have a significant impact on how much your policy costs. The higher your deductible, the lower your premiums will be. However, you need to make sure that you can pay your higher deductible in the event of a claim. Raising your homeowner's insurance deductible from $500 to $1,000 can mean a 25 percent reduction in your policy's premium.
Attractive Nuisances
While your pool may offer plenty of hours of fun in the sun, it can also be costing you more when it comes to your homeowner's insurance. Things like pools, trampolines, and other additions are often categorized as attractive nuisances. This is because these features can increase the chances of a guest or neighbor becoming injured on your property. Adding safety measures, such as a fence around your pool, can reduce the impact these features have on your premium. However, before you build, it's a good idea to reach out to your insurance company to see what effect it will have on your homeowner's policy.
When it comes to your homeowner's insurance, there are a variety of things that can impact your premiums. The type of coverage you choose, in particular, can affect the total cost of your premiums. Your deductible will also impact your yearly expenses. A higher deductible will usually mean lower rates. Finally, anything that can be considered an attractive nuisance can raise your insurance rates.
For more information about home insurance, contact a company like Oliveira Insurance Agency.