Why do people choose to buy insurance? Some of them might say that their family and friends have talked them into it. There are others who will say that they did buy insurance for their car and their home because it is what they should do. Only very little understand what their home insurance purchase was for.
Customers usually buy insurance to minimise the risks that may come when an accident happens to their home. They want to make sure that they would have enough money to cover the repair or possibly rebuilding of their house. However, many who buy home insurance seem not to understand the factors that cause their insurance premiums to increase or decrease before a peril even occurs and puts their house at risk. It is best to speak with an insurance advisor so that you’d be made aware of the possible red flags in the insurance policy you are buying before you make any form of the claim.
Here are some of the risk factors that could make a house or property at risk for higher premium:
•   Dogs. Not all dog breeds are man’s best friend. If you plan to own a German Shepherd, Siberian Husky, Doberman, or any breed that is considered aggressive could increase insurance rates. This isn’t true only for dogs. It also applies to other animals, especially those considered exotic like snake or monkey because they could pose a potential risk to the people who live in the house and those in the neighbourhood.
•   Bad credit rating could make the insurance company charge you with a higher premium. Insurers conduct their research too. They check on your bills and if you have updated them. They look at the fact of whether you pay them on time or you often miss out payment schedules. A low credit score will make you pay more.
•   Location. Just like when you’re selling real estate or looking at buying one, the area of the home matters. Its location tells the insurance if the home is at a higher risk of falling victim or theft or burglary or if it is greater danger of catching fire. Is it located in a hurricane-prone area? Or will it end up in a sinkhole? All these will make insurance companies charge you more.
And yet at the end of the day, what matters is that you’re able to buy insurance for your home. Protecting your home and making sure you’re able to purchase the right coverage is always the best fall back.