A homeowner’s insurance policy is determined by several different factors, some of the biggest influencers of the premium are described below:
1. Territory or region of the country
Where the house is located is going to be a big determining factor for the cost of the home. For instance, a homeowner’s policy is going to cost differently in Kansas, than it is in Montana. The chance of a tornado taking out a home or entire town in Montana is not the same as it is in Kansas. Each territory or geographical region of a country has different exposures. An insurance company will rate a home in Kansas for a tornado differently than it would for a home that’s not in the “tornado alley” area of the country.
2. Protection class
Protection class, is best understood as how long it will take for a responding fire department to get to your house to put out a fire. So, how close are you to the fire station and how close does your house sit to a fire hydrant. Houses located in more rural areas, further away from a fire department might burn longer and cause greater damage, if it takes longer for a fire truck to reach the property. Equally, if there isn’t a fire hydrant very close to the house, will have to rely on a pumper/tanker trunk capable of carrying at least 3,500 gallons.
3. Dwelling replacement
The first coverage of your home is the replacement cost, or how much money it will cost to replace your home entirely. The insurance company will do a total evaluation of your home that will determine how much money they think it will cost to replace your home in the event of a total loss, like a fire. This is called the replacement cost estimator, and every insurance company will determine for themselves how much coverage A, or replacement cost should be on the policy. A common type of loss to a home in Kansas, is tornado, or wind damage. It’s important to not only have enough money to replace the home, but the insurance company must factor in how much it will cost to remove all the debris, after the tornado has hit.