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Homeowners’ insurance protects your most important investment. You want coverage sufficient for your needs, but also reasonable premiums to keep payments manageable. Understanding the factors used to calculate premiums allows you to make the best decision for your finances. 

How Insurance Premiums Are Calculated

homeowners insuranceInsurers look at several factors to determine how much a person pays for home coverage. Older homes with outdated systems or other issues are often considered higher risk, so they would incur a higher insurance premium.

Certain pets can also increase costs. Some insurers have a list of dog breeds they consider higher risk, and any policyholders with these dogs will be subject to higher rates. 

The price of rebuilding your home is another factor. This is different from the market value of your home because it accounts for material and labor costs necessary to restore a structure.

The neighborhood you live in, claims you've made in the past, and the level of insurance protection you require are also considered. 

Tips to Lower Your Homeowners’ Insurance Rates

Your deductible affects monthly premiums. The higher the deductible, which is the amount you must pay out of pocket before your insurance kicks in, the lower monthly payments will be. However, you must have enough money set aside to cover the deductible; otherwise, your insurance won’t payout for the rest. 

You can also make alterations to your home that improve safety. Installing fire alarms or security systems reduces risk, which lowers rates. You can also review your current homeowners’ policy to ensure you need all of the coverage contained within. 

 

Your insurer should play an integral role in finding reasonably priced insurance products that offer ample protection. Based in Alexandria, KY, Northern Kentucky Home Insurance Company is a cooperative insurance company, where each member contributes to a collective fund which covers members’ claims. As an independent insurer, they can give you multiple options. Along with homeowners’ insurance, they also provide farm coverage. Start working on your quote today by calling (859) 635-2500, or visit the website to learn more.

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