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The Price of Your Homeowner's Insurance

By Jynette DeMarco

Where you live plays a large role in how insurance companies decide how much to charge you for your home owners insurance policy. Insurance companies take into account the different risks associated with different areas while calculating the cost of your plan. Despite the fact that much of your plan is dependent on your location, there are other factors that influence how much your plan will cost.

Location related factors influencing the price of your plan include:

  • If insurance companies believe that you live in a "high risk" area that has severe weather patterns or a high crime rate
  • The average price of homes within your zip code
  • Your proximity to a fire or police station

Other factors influencing the price of your plan include:

    The age and style of your house. For example, an insurance company may charge a brick house less than a wood house because it is less likely to burn down and therefore less of a risk for them to cover.
  • Your deductible. Another way to decrease the initial cost of home insurance is to increase your deductible so that your monthly premium is less.
  • If safety systems, such as smoke and carbon monoxide detectors, are installed in your house. These alarms reduce the probability of damage being done to your home and therefore might decrease the price of your plan.

If you do simple upgrades to your home like adding an alarm system and storm shutters, you can likely decrease the price of your home owners insurance plan, even if your home is located in a "high risk" area.

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