There are several different factors that weigh into how much you should pay for home insurance. The question itself has two separate elements. There is how much coverage you need and how much you should pay towards it each month. The amount you pay towards your insurance each month is called the premium. Interestingly, you do not get to determine how much insurance you need, but you do, however, get to negotiate your premiums.
How Much Insurance
The amount you are required to insure your home is actually dependent on your lender and the insurance company. Your mortgage typically has a clause that determines how much insurance you need. If you’re buying home insurance in Alliance Ohio, 80% is fairly typical. A mortgage will require that your insurance pay 80% of your home’s value.
Insurers, however, often only offer plans that cover 100% of the home’s value. Since a fire or catastrophe does not free you from the mortgage, you should typically buy a plan that covers 100% of a home’s value. The only reason to buy a plan that covers less than that is if you have money in the bank. Buying an Alliance Ohio home insurance plan that covers less than 100% of your home’s value can reduce your premiums.
Premium Rates
The premium is how much money you have to pay each month for your home insurance. It differs depending on the negotiations you have with your insurer as well as the value of your home. When you apply for insurance, you will be evaluated. The insurer will evaluate the likelihood that you will make a claim. An older home with older wiring, for example, is more likely to make a claim. You’ll also be evaluated based on your perceived ability to pay.
All of that affects how much you pay for insurance.
