How are home insurance premiums determined?

Your home is the talk of the town in Minneapolis, MN. There are a few minor repairs that your dwelling place needs, but you figure that these things can be addressed at a later time. Did you know, though, that the cost of your home insurance premium may rise or fall depending on the condition of your home? Suddenly, those minor repairs could cost you a significant amount of money. 

The agents at Calhoun Risk Management can help you understand how home insurance rates are calculated. Read on to get a general overview of what insurers consider when deciding how much to charge in premium rates. 

How are home insurance premiums determined?

Home insurance premiums are heavily influenced by the replacement cost of the home. Insurers estimate how much they would have to pay if your home were damaged beyond repair. They then decide whether to charge more or less depending on the figure upon which they settle. Large homes tend to cost more to insure because of the high replacement value. Meanwhile, smaller homes may cost less because of their limited square feet measurements. 

Another factor that insurers consider when determining premium rates is the age of the home. Newer homes tend to cost less to assure because of their recent construction. Meanwhile, older homes may cost more to insure because of the higher probability of total destruction when tragedy strikes. The number of occupants is also a factor that insurers consider as the likelihood of incidents arise when more people reside in the home. 

Many homeowners in Minneapolis, MN are not aware of the impact that their credit scores have on home insurance rates. The reality is that consumers with lower credit scores pose a higher risk of liability that those with higher credit numbers. 

Call Calhoun Risk Management today!

Our agents can give you a breakdown of what makes your home insurance premium rates rise and fall. Call us today to get started with a consultation and a quote!