When it comes to the yearly premium you will have to pay for homeowners insurance, the rate you will pay is determined by a wide range of factors — some of which are under your control and others that are based on circumstances you can't control as much. It is important to understand these factors so you can have some control over your premium costs.

Credit Score

Your credit score cannot be the reason an insurance company refuses you homeowners insurance per federal law. However, your credit score can be considered when figuring out the price you pay. If you have a high credit score though, you may enjoy a nice discount on your premium.

Claim History

Every time you make a claim, it is connected to your name and information. Your claim history follows you from one house to the next. If you have made a lot of claims in the past, then you may find yourself facing higher premium costs. Generally, the fewer claims you make, the lower your premium will be. You can control this by only filing claims when the damage is serious enough that it exceeds your deductible. Don't call in claims you can easily fix on your own.


Third, your deductible amount can greatly impact your premium. A higher deductible can significantly reduce your deductible, and a lower deductible can drive up your premium. It is a good idea to set aside money in savings so that if you need to pay your deductible, you can easily manage it. As you have more money saved up, you can raise your deductible and lower your premium rate.

Quantity of Coverage

Fourth, the quantity of coverage that you have will impact your premium rate. If you have a mortgage, your lender may require you to carry certain minimums. From there, it is up to you to the amount of coverage you purchase.

Be careful when adjusting the quantity of coverage you have. You want to make sure that your coverage is large enough so that it covers the cost to replace your dwelling and personal belongings. You also want to make sure your liability and medical expense coverage is large enough to cover an accident on your property. You can adjust these levels so you have the coverage you need in an emergency, but you are not overpaying for things either.


The location where you live can impact your coverage rates in many ways. If the area is prone to lots of damaging storms, your rates may be higher than if your home was located in a less storm-prone area.

The crime rate where your home is located will also impact your premium. If there are lots of break-ins, the chances of you filing a claim increase, which can increase your premium rate. Luckily, installing security measures such as an alarm system can help counteract this increase.

Fire Safety

If your home is located close to a fire station, your rates may be lower than if your home is further from one. If your home has fire safety features such as a metal roof, your rates could be lower as well.

Lots of factors impact your homeowners insurance premium. Some factors that you can control include your level of coverage, deductible amount, claim history, and credit score. You can also add general safety and fire safety features.

Contact a company like Illinois Insurance Center Inc to learn more.