When shopping for homeowners insurance, the first thing to remember is that homes in Virginia are more likely to get damaged from weather than other states. As an Atlantic coastal state, severe weather and natural disasters such as hurricanes, floods, and storm surges are common.
After weather risks are factored in, there are a bunch of other major influences on home insurance rates. What you pay depends on specifics in your policy, factors about your house, and things about you. Everything from what deductibles you choose and where your home is located to what breed of dog you have can play a role in determining your rate. There are also things you can do to save money on your home insurance.
When you shop for homeowners insurance, it's best to consult a licensed professional. Independent insurance agents can shop and write from a wide selection of carriers for the best fit for you. They'll also help you navigate the various decisions you'll make around out-of-pocket costs associated with your policy.
Deductibles are the amount you pay before your insurance company pays in the event of a claim. Choosing the right deductible is a significant decision. The higher your deductible, the more you can save on your rate, but be prepared to suddenly fork out a potentially large sum of money. Deductibles can range from $500 to $2000. Think of it this way; the lower your deductible, the more coverage and security you have. There may also be other weather-related deductibles for things like wind, hail, and hurricanes if you live in a disaster-prone area.
Liability limits on your home insurance policy provide financial protection for hefty medical expenses and potential lawsuits when you cause injury to another person. While most experts recommend limits of at least $300,000, if you have combined assets exceeding $500,000, you may want to consider additional coverage in an umbrella policy.
Your home and the various details related to its construction and condition significantly impact your insurance rate. This information is gathered to be sure you'll have adequate coverage. Underinsuring a home is the most common mistake made when buying homeowners insurance.
Often market value is used to determine the amount of insurance you need. However, this is 80%-90% of the actual value of your home and property. Replacement cost home insurance will pay the cost to rebuild your home at the time of the loss and save you the heartache and shock of making up the difference. A professional appraiser can provide an accurate replacement figure.
Location
Age and construction materials
Size
Remodeling
Swimming pool and hot tub
Condition of roof
Proximity to coastline or water
Proximity to fire department/ hydrant
Wood-burning stove
Security features
Smoke Detectors/sprinkler system
Crime rate
Other structures- shed/garage
Your lifestyle and the choices you make can affect your home insurance rates. Insurance companies use personal factors to help them decide whom to insure and what to charge. Just as banks use credit scores for lending purposes to gauge on-time payments, studies show certain individual details help insurers assess the likelihood of future claims and their cost.
Credit history
Marital status
Dog breed and aggressive behavior
Type and number of claims
Age
Insurance score
The value of your belongings
Home-based business
There are so many ways to save money on your homeowners insurance premium that we wrote a blog post about it. We said this earlier, and it's worth saying again: use an independent agent to shop. Working with an independent agent means that they will shop around on your behalf for any company that offers the best rates and coverages. Single-company "captive" agents sell only one brand of insurance.
Bundling is in a tie for first place with using independent agents for money-saving tips. Get all your personal lines insurance from the same company and you can earn nice discounts. Like many insurers, we explain all the benefits that come from bundling on our savings page, but make a note: we offer a 35% discount for home, car, and umbrella insurance bundles.
Now you're more informed about what information home insurance companies use to determine rates. This knowledge can help you make intentional decisions about lowering your insurance costs and comparing rates when shopping for home insurance.