Debunking myths about what goes into your home insurance premium.
A few home insurance myths lead people astray when it comes to home insurance, and the following are just a few as it relates to what goes into determining your premium.
1. Gas appliances
Gas appliances, like stoves and dryers, are generally treated no differently from a home insurance standpoint than electric appliances.
2. One child or 10
Whether you've got one child or 10 little ones living with you, the number of children you have will not affect your home insurance rate.
3. Your marital status or age
When it comes to home insurance, your marital status or age is typically not a factor. The main exception here is if you’re older (as in approaching retirement), you may qualify for a discount. This discount could be as much as 10%. The availability of this discount may vary by home insurance provider, illustrating why it's important to shop around for the best price.
4. The size of your mortgage
How much you owe on your mortgage is also not a factor. It doesn't matter if you owe $50,000 or $500,000; your home insurance rate will be the same. However, if you're mortgage-free, you could qualify for a discount that could be as much as 15%. On the flip side, if you have multiple mortgages on the same property, this could increase what you pay for coverage.
5. The market value of your home
The market value of your home is not a consideration when it comes to your home insurance rate. I know a lot of you are reading this and saying, “no way!” But it’s true. A home is insured not for its market value, but the cost to rebuild it.
Market value takes into consideration things like location, land value, and "comparables" (how much similar homes sell for in the neighbourhood). A home’s rebuild value focuses on what it would take to rebuild and duplicate your home; materials, labour, permits, etc., in the event of a total loss, like fire.
Compare home insurance quotes for a cheaper rate
While these five factors don't typically affect your home insurance rate, one that will affect what you pay for coverage is shopping around. Spend less by comparing home insurance quotes today in minutes and find out how much you could be saving!
