FRIDAY, APRIL 15, 2022
The home buying season is right around the corner. If you are like many Millennials, then you’ve already begun the process of looking for a home. You may have already prequalified for your mortgage. With your focus squarely on your goal of owning a house, your due diligence will pay off in the end.
However, it’s important to consider the costs of homeownership before you purchase your home. There are many costs house hunters fail to consider, including the cost of insuring your home. The following are some factors you should consider to ensure you are keeping your home insurance costs low.
Crime Rates Affect the Cost of Home Insurance
When it comes to insurance, people who are considered less risky receive the best insurance rates. In fact, if you are deemed a risky customer, there is a premium you must pay to get insurance. If you are considering purchasing a home in an area where there is a lot of violence, you can expect your insurance premiums to be higher than normal. Fixer upper homes may be appealing, but if these homes are in a neighborhood that is known for criminal activity, then you should factor in a higher home insurance premium.
Have Great Credit, Don’t Overextend Yourself
Another not-so-obvious factor to consider when it comes to the cost of home insurance is your credit. Many insurance companies have started assessing credit scores to consider the rate their customers must pay for insurance. Typically, individuals with lower credit ratings take risks or behave in a way that could increase their chances of filing a claim. Even if you’ve already prequalified for a home and set up credit accounts at local home improvement stores, your credit could have taken a hit and dropped since you checked last. If either of the scenarios is your reality, then it’s possible that you will pay more for your home insurance.
Don’t File Claims
Although your insurance company exists to be your financial partner in times of a loss, filing multiple claims or fraudulent claims could jeopardize your ability to remain insured. If you are abusing the system, then your insurance company has the right to go beyond increasing the cost of your insurance— they can cancel your home insurance. Don’t take your insurance for granted; only file a claim when you have experienced a real loss to ensure the cost of your home insurance remains low.
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It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional
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