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Finding Enough Insurance Coverage

When it comes to making sure that your home and family are safe and sound, few things are as important as choosing the right insurance plan. About six months ago, my home burned to the ground, and without the right insurance plan, we would have been toast financially. Fortunately, because we had prepared properly, we didn't have any problems when it came to making sure that we could rebuild our place. This website is here to help anyone who might be struggling with which insurance policy to choose. Check out this blog for great information on finding the perfect policy.


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Finding Enough Insurance Coverage

What Factors Determine Your Home Insurance Premium

by Jason Prescott

Everyone wants their home insurance to be affordable, but it can be tough figuring out why your insurance premium costs what it does. There are many factors that go into determining what you pay, which is why you should be aware of the following things.

Your Home's Structure

One big factor that determines your premium is the structure of your home. Your insurance company factors how much it will cost to repair your home in a total loss scenario, so the actual construction materials play a big part in that. They will need to cover your home so that it could be repaired in the exact form that it was before, so they will consider everything.

For example, there is a price difference between having brick or vinyl siding for the home's exterior, and carpeting or hardwood for the flooring. If you make changes to your home that you want to have insured, such as finishing your basement, there will be additional construction material that needs to be factored into your premium as well.


Once your insurance provider determines the cost of construction materials for your home, they factor in inflation as well. The price to repair your home today will be different than what it is 20 years from now. Without adjusting your coverage for inflation, you could find that you don't have enough insurance for when you need it down the road. This is often the reason that your policy increases in price each year, to maintain the proper level of coverage.

The Deductible

Your home insurance requires that you pay a deductible before your insurance provider starts paying for repairs. The more you pay before insurance has to pay for the balance, the less you pay in premiums. While a higher deductible can be a great way to save money, it needs to be a practical amount so that you can actually use your insurance.

For example, if you have a $10,000 deductible for your home insurance, you need to have $10,000 in savings to pay for that deductible. If not, you will be unable to use your insurance. Make sure your deductible is something that is affordable for your budget, instead of just going for what makes your premium the lowest.

If you have questions about what factors determine your premiums, be sure to ask your insurance agent. They can walk you through what makes up your specific policy.

Contact an agency like Germain Insurance Agency for more information.