If you are currently in the market for home insurance, there are some things you should know first. While you might already know that there are different policies with different areas of coverage, there are some things you might not already know. Here are some different things to know about home insurance before you choose the right policy.
It Doesn't Often Include Flood Insurance
One of the bigger surprises when it comes to home insurance and what it covers is that flood insurance is rarely included. This means if you have a major plumbing leak, burst pipes, or even a flood from a heavy rainstorm, the damage is not going to be covered by your regular homeowners' insurance policy in most cases. However, many insurance companies offering home insurance also provide separate policies specifically to cover flood damage. It is highly recommended that you get this type of policy.
Your Home's Location Makes a Big Difference in Insurance Premiums
There are a lot of things that should be taken into consideration when determining what your insurance premium is going to be. Among them is actually where your home is located. The insurance company wants to know the type of neighbourhood and what the local crime rate is. If you live somewhere that has a slightly higher crime rate, then you might pay more for insurance because there is a higher risk of having your home broken into. On the other hand, living in a safe neighbourhood may lower your premium a little.
Good Credit Means a Lower Premium
Your credit rating is another thing that can affect your premium. Some people are surprised that their credit rating makes an impact on more than applying for loans or financing. Your insurance company uses your credit rating as a way to determine your risk in regards to paying the premium. A lower credit score often means you are not as financially responsible as you could be, which means you might not pay your premiums on time. This could cause you to pay a down payment or higher premium to offset the risks.
If you have any questions about what policy to choose and what it covers, speak to an insurance broker. They are able to recommend different types of policies and help you understand exactly what is going to be covered. This includes letting you know whether a separate flood policy is required and whether or not adding an alarm will give you a break on your insurance premium.