What are the Important Factors that Help in Determination of Home Insurance Premium?
If you are looking for a home insurance or a condominium insurance then it will be necessary for you to understand various factors which play a crucial role in the whole process.
As such, we will be going through details of factors that are used for determining your home insurance premium and then we will look into coverage that is available under condominium insurance.
What are the important factors that help in determining insurance premium?
Few of the important factors that play a crucial role in the determination of your home insurance premium include:
- Nature of your residence, whether it is a seasonal residence, apartment, rental property, or a single or multi-family home.
- Location, size, and age of your home.
- The material used for the construction of the house such as cement, brick, etc.
- Property's replacement value.
- Presence of electrical, plumbing, and heating systems.
- Measures related to fire protection such as distance from a fire hydrant.
- Location where your home is situated and fire as well as the crime rate in that location.
- Your claims history.
- Premium amount will also depend upon the type of policy you have selected. For instance, if it is a standard or broad policy or a special/comprehensive one.
- Additional coverage you are taking for things that exceed policy limits.
- Any deductibles that you have chosen.
A condominium owner has title to his or her unit and in addition to it, the owner also has a share in common sections like a garden, parking garage, swimming pool, or lobby.
In case of a condominium, the insurance plan usually differs from what you get for a conventional home. Insurance coverage is provided under 2 separate policies; one policy is applicable to individual unit owners and the other policy is for condominium corporation.
Let us look at what both of these cover.
Coverage Under Condominium Corporation
- The building as well as common property like driveways, garages, pools, roof, stairs, hallways, etc.
- Fixtures installed or built as elements of standard or original construction like wall or floor coverings, plumbing, and electrical fixtures.
- Assets of the condominium like equipment, furniture, etc.
- Liability for claims related to bodily injury and property damage occurring on the common property.
Coverage as an Individual Unit Owner
- Personal property consisting of things like furniture, appliances, clothing, and items that are stored in the locker.
- In case of an insured loss, additional living expenditures that are over and above the usual living cost.
- Coverage for personal liability if any property damage or bodily injury is caused unintentionally to others.
The Bottom Line
We will end here with a final note that insurance is quite necessary when you own a personal property. The coverage you get under home insurance protects you from having to bear losses in case of any eventuality. As such, if you own a home or condominium then you should get it insured as early as possible.