Homeowners insurance protects you if fire or natural disaster damages your home or belongings. It also protects you if your belongings are stolen or someone gets hurt on your property and needs to see a doctor or decides to sue you. Applying for homeowners insurance doesn't guarantee acceptance, and how much you pay is based on how risky you and your home seem to be.
Factors such as type of construction, location and age and condition of the home help determine your qualification for homeowners insurance. Brick or masonry homes are considered less risky than wood ones. Those nearer the fire station and fire hydrants are less risky than those miles away. Older homes, especially fixer-uppers, are seen as riskier than newer homes in good condition. Insurers may view homes in some urban areas as crime targets and those on the beach or near geographic faults as more prone to natural disaster. They also consider the number of claims filed by your neighbors and by previous owners of your home.
Your lifestyle choices affect your qualification, as well. If you ensure your home and auto with the same company, you're likely to qualify more easily and pay less. Trash your credit and you'll won't qualify or have to pay more. You'll also pay more if you've filed a lot of claims for damage, theft or liability in the past. You also may be considered a higher risk if you own a dog breed that is known to be more dangerous than average.
You can make a few changes and improve your qualification. Insurers may cut your costs if you install smoke alarms, sprinklers, dead bolt locks and burglar alarms. On the other hand, they are apt to charge you more if you add a wood stove or furnace, trampoline, playscape or pool.
Insurers often charge different rates for the same coverage. You also may qualify for insurance with one company, even if you don't with another. When shopping around, consider price, reliability and fairness in responding to claims. If you can't qualify for insurance with a commercial carrier, check out state programs, such as a Fair Access to Insurance Requirements Plan, or a wind or coastal plains insurance pool. These programs can be found on your state's government's insurance department's Web site.
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