How are Premiums Calculated?

Apart from the obvious factors such as the capital value of your house and belongings, insurance companies consider a number of other factors when determining your premium. These include:

1. The Location of Your Home

   Certain areas have are more likely to experience extreme weather and/or other natural disasters such as hurricanes, earthquakes, or flooding. This is likely to increase your premium. Conversely, if your home is located near a fire hydrant or fire station, your premium may be lower.

2. The Age and Type of Construction of Your Home

   If your house is new, contains approved wiring, or is constructed materials suitable for the climate in your area, you may receive a discount on your premium.

3. The Security and Safety Features Installed in your Home

   If your home has smoke alarms, sprinklers, burglar alarms, or dead-bolt locks your insurance premiums may be lower.

4. The Deductible

   The deductible is the amount you have to pay out of pocket for each claim. Choosing a higher deductible will reduce your premium.

Disclaimer: This article is provided for informational purposes only and should not be considered a substitute for professional advice. Please read your policy carefully and talk with your insurance agent to determine your actual coverage, which may differ from that described above.