Insurance shopping advice often focuses on finding the cheapest price. Do you know what trade off you are making to get the cheapest price? Finding the cheapest insurance can leave you with unintended coverage gaps or poor customer service. If you are like most people, you want good coverage without paying more than you need to. So, understanding how insurance companies calculate your price can help you get the best price for the coverage and level of service you want.

How do insurance companies calculate your price?

Insurance companies use many different variables when calculating your homeowners insurance premium—some pricing variables are within your control and some are not.

1. Pricing elements you cannot change:

• Your age
• The age of your home
• The location of your home and its servicing fire department

2. Pricing elements somewhat within your control:

• Claims activity – The price of your insurance is often increased after a claim. While insurance companies know claims happen, risky behavior can lead to more claims activity which will increase the price of your insurance.
• Roofing – Age and type of roofing material typically affect your insurance price. Notify your agent if you upgrade your roof. 

3. Pricing elements you select:

• Limits – Be cautious if adjusting your limits. It may be possible, but not wise, to get cheaper insurance by lowering your dwelling limit or liability limits. Your dwelling limit is the amount that will help pay to rebuild or repair your home. If you reduce your dwelling limit you could be on the hook for any reconstruction that cost more than your limit. Your liability limit helps to pay for injury or property damage you cause to others or if you are sued. It is important to maintain high enough limits to protect your finances.
• Coverages – You might choose to eliminate some optional coverages if you decide you can afford to cover specific losses yourself or the coverage is not needed for your situation. For example, some insurance companies offer an optional coverage for matching roofing which would pay for a full new roof even if only a portion was damaged to avoid having a mis-matched roof with some old and some new shingles. If you decide you would pay the additional cost yourself to replace the undamaged portion of the roof or that you would be okay with having mis-matched shingles, then you could eliminate this optional coverage.
• Deductible – You might choose to increase your deductible if you can afford a larger out-of-pocket expense when a loss occurs.
• Bundle – Most insurance companies discount homeowners and auto insurance premiums if you bundle both with the same company. Acuity has an added benefit of a single deductible when you bundle your home and auto. This means when you have damage to both your home and auto you would only pay one deductible which can save you hundreds of dollars.

Insurance companies offer a variety of discounts as well such as paid-in-full, good student or accident-free discounts. Beck Insurance Agency can help you find the right coverages, limits, and any discounts to meet your needs.   Contact Beck Insurance Agency today by calling 567-406-3006, email us at help@beckinsurance.com, or click here to submit your request.