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Calculating Homeowner's insurance

When it comes to calculating your total cost for homeowners insurance, there are many factors that are considered. With that, here are four things insurance companies view to decide if they want to carry your homeowners insurance, and its total payment.

Learn how your homeowners incurance is calculated.
Photo provided by Nicola since 1972 via Flickr

Value of the home

The make of your home, its amenities, size, and dimensions help determine its value. When an insurance company decides to take you on as a client, they will want to know how much your home will appraise for.

Area you live in

If you live in an area that has many other nicely built homes, this can increase your home's value. On the other hand, if your neighborhood has many homes that are older or needing updates and remodeling, this can decrease your home's value.

Personal items

What you have in your house plays a big role in how much you will be insuring. If you have a lot of valuables, you will want to know that they are being protected. Therefore, you may choose to pay a higher premium as you choose to ensure your treasures.

Your credit

If you have poor credit, you may have to fish around for an insurance provider that will carry you. Your credit score and history plays a factor in whether an insurance company will insure you and how much your monthly payment will be.


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