As nearly every homeowner is hoping to reduce their spending amidst the recession, experts are encouraging homeowners to reevaluate their home insurance policy. Specifically, in reevaluating your home insurance policy, you can determine whether or not you are paying for specific personal / home-related risks that are driving up your costs! By identifying and eliminating risks, you can fight to reduce your insurance spending.
Assessing Risks to Reduce Rates
According to reports, homeowners who generally pay the lowest home insurance costs are individuals whose homes are classified as less risky. In other words, the safer your home, the cheaper your insurance policy. Common factors that may influence the “risk assessment” of your home include:
- The age of the home – The home’s foundation, materials used in construction, electrical wiring, and other building issues can make some homes more vulnerable to damage and potential insurance claims
- The neighborhood / surrounding area – Some city regions may pose more risks than rural areas, or vice versa. As such, the home’s neighborhood can impact insurance costs.
- Surrounding crime, accident, burglary reports / incidents- High crime and dangerous areas pose greater threats to a home owner’s property.
- Location of home to surrounding potential hazards – If the home is located near a dangerous intersection that has incidents of automobile accidents / crashes, then a home near such location could be more vulnerable to damage from drivers, road debris, and other hazards.
- Susceptibility of home to natural hazards – As natural hazards can seriously damage one’s property, insurance companies typically assess the estimated risk of surrounding natural hazards. For example, if your home is in a high-flood region, then your insurance costs will be higher than an individual in a non-flood region. Similarly, if your home is in a region with harsh winters, then you may be paying higher rates as you’re at a greater risk for snow / ice-related harms and costs.
How to Cut Risks and Costs
In evaluating your own home’s risks, contact your insurance company to identify any specific changes that may help boost your home’s overall “riskiness rating.” For example, if you live in a higher crime area, find out if you can cut your insurance costs by implementing additional security measures, such installing a security system, deadbolts, and or other protective items to your home.
