InvestorQ : Are there any factors that will affect the premium an individual pay on his/her home insurance policy?
Rohan Bhadani made post

Are there any factors that will affect the premium an individual pay on his/her home insurance policy?

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Swapnil Sarang answered.
3 years ago
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The amount a person pays towards any insurance he/she purchases is called a premium. A premium is payable at varied frequencies such as- monthly, quarterly, half-yearly or annually.

The various factors that affect a policyholder’s home insurance premium are:

Location of your house: The location of your house is a very important factor that determines your premium amount. If your house is located in an area that’s frequented by storms, hurricanes, cyclones etc., or in close proximity to a flood-prone water body, in a region experiencing frequent earthquakes or in a neighbourhood where theft, robberies and other such activities are rampant, then your premium is likely to be higher.

Characteristics of the house: Various aspects of the house, such as its age, structure type, roof, wiring, and garage can affect the premium amount. The older the house, the higher it might cost you to get it insured. Additionally, the materials the house is made of - brick, stone, frame or synthetic siding - can also affect your premium amount.

Your financial and personal habits: Personal factors like your credit history and lifestyle habits can affect your house insurance premium. For example, a smoker might have to pay more towards his/her home insurance premium vis-à-vis a non-smoker. A good credit history, which plays a role in almost all types of insurances, can help lower your insurance premium.

Quality of house protection: If you have taken necessary steps to protect your house by installing protective devices like smoke detectors, fire alarms, deadbolt locks, burglar alarm systems, sprinkler systems, fire extinguishers, etc., then you will have to pay a relatively lower premium amount. This is because the company deems you to have taken all steps to ensure complete protection of your house.

Claims history: If you have a claim history, then you will have to pay a higher premium, vis-à-vis if you didn’t have one.

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