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How to Make Sense of Home Insurance Rates?

home insurance rates
If you live in the Chicago area, or have recently moved to the area, you are probably trying to make sense of your home insurance rates and wondering how a company arrives at the rates they do. Between the fine print and all of the different coverage options out there, it can be difficult to decipher what you need and what you are entitled to. Here are eight things an insurance company will take into consideration when putting together your policy and offering you a quote.

Size of the house: A larger home will obviously cost more to insure than a smaller one, not only because of the size but because there will be more valuables inside it.

Replacement cost: The company will take into consideration what it would cost to replace and/or rebuild today; regardless of how much you paid for it 10 or 15 years ago.

Proximity to a Fire Hydrant and Fire Station: Rates will be lower if you are located near a fire station or fire hydrant. This assures the company that if a fire were to break out the fire department would get there quickly.

Security System: If you have a security system that is directly linked to the fire and police, the company will most likely give you a reduced rate. Even if the system is not directly linked, cameras and alarms are usually sufficient to allow for a better rate.

Fireplaces: Do you have a fireplace and if so how many? Gas fireplaces are not considered as much as a concern or risk as wood burning fireplaces or woodstoves.

Heating: Is your home heated by natural gas, propane, oil or electric? This will be taken into consideration when your insurance company puts together your policy. Propane and oil are considered a higher risk than natural gas or electric.

Crime Rate: If you live in a high crime neighbourhood, you may have to pay more even is you do have a security system or other measures in place.

Liability and deductible: The more liability coverage you have, the higher your rates will be; and you will probably pay a higher deductible as well. For example, $1,000,000 liability coverage may cost you $500 or $750 deductible, but a $200,000 liability may only cost you $300 – 400 deductible. You don’t want your coverage to be too low though; if someone slips and falls on your property you want to know you are covered for their medical expenses.

Rates vary greatly from home to home and also from area to area. The best course of action is to contact an agent that is familiar with your local area and can advise you on what policy is best for you. They can also advise you on ways to save money on your rates. Sometimes, home insurance can also be grouped together with automobile and health, to give you an even better rate. The company will take care of moving everything over for you, to make things easier

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