Condition of Home
Homeowner insurance rates are determined in much the same way that all other insurance premiums are calculated, according to the Insurance Bureau of Canada (IBC). Your insurance company will decide the rates based on several risk-related factors.
The condition of your home plays a large role in the cost of your premium. Your insurer will want to know what, if any, home repairs are needed, if the dwelling has updated plumbing and electrical and whether or not it has a newer roof. For example, the IBC says most insurers like to see that a roof is no more than 20 years old. Otherwise some policies may charge a higher premium and/or pay as little as 25 percent of the replacement cost for damaged roofs that are approaching the end of their estimated lives.
Safety Alarm
Before your insurance company establishes a home insurance premium, it will inquire about its safety features like fire alarms, carbon monoxide detectors and security systems. These precautionary devices will help lower the cost of your home insurance.
Type of Home
Your home insurance premiums may vary depending on what type of structure you live in. Allstate Insurance says a condominium policy will generally cover interior structures such as lighting fixtures and wallboard. A single-family home's entire structure is covered as well as its detached garage and any sheds that sit on the property. A manufactured home's entire structure is typically covered by homeowners insurance, but a second optional policy may be required for sheds and garages.
Amount of Deductible
Your home insurance premium will vary depending on the amount of your deductible (your-out-of-pocket expenses before your insurer makes good on a claim). In general the higher your deductible the lower your premium. According to Financial Strategies Online (FSO), deductibles usually start at $250. If you double that amount you could save more than ten percent on your premium.
Home Renters Insurance
If you are leasing your home, renter's insurance rates will vary among insurance companies. Renters' premiums are based on the location of the property, your deductible and if you need any additional coverage for valuables such as expensive jewelry. State Farm Insurance says renters insurance can protect your personal belongings in the event of theft, vandalism and fire.
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