Homeowners insurance will protect your real estate investment. If you’re unsatisfied with your current rate, there may be a few steps you can take to work towards lowering your premiums. Understanding how insurance costs are determined will help you take these measures. Here’s a guide to how agents calculate insurance premiums and what to do to lower yours. 

How Premiums Are Calculated

There are several factors considered when an agent calculates your homeowners insurance cost. Replacement cost, which is how much it would take to completely rebuild your home, is a key factor. Keep in mind that this amount differs from your home’s market value, which will likely be less. The area where you live may also increase costs, since a neighborhood with more crime will be considered riskier to insure. 

The condition of your property is another factor that contributes to pricing. Older homes are prone to more issues and may be regarded as less safe than newly constructed ones. This is especially true when it comes to older wiring, which might raise the risk of fire. Square footage, pets, and your personal claims history also play roles in the resulting rate. 

Tips for Lowering Your Rates

Since safety lowers costs, adding features like burglar and fire alarms might make you eligible for a discount. Upgrading your roof, electrical system, or plumbing might also shave some money off your insurance premiums. You should also ask your insurer whether bundling different types of coverage, such as home and business insurance, makes you eligible for a discount.

Finally, increasing your deductible will drive down your monthly rate. However, make sure you have enough money set aside to pay the higher deductible should you need to file a claim. This may be a good option for someone with robust emergency savings. 

With over a century spent serving clients in and around Marion, WI, Pella Mutual Insurance Company will help you find an affordable homeowners insurance policy. Because they focus on property coverage, they’re equipped to answer your questions and ensure you secure comprehensive protections. Find your local agent today by calling (715) 754-5039 or visit them online to see a full listing of their insurance products.