The Climate You Live In Has A Profound Effect On Your Homeowner’s Policy

Homeowners insurance policies are crucial for any American who owns real estate. Unfortunately, it’s one of the insurance policies that varies the most in cost depending on where you live.

While there are many factors that go into calculating the cost of someone’s insurance premium, the location in which you live can have a profound effect on the actual cost of someone’s homeowners insurance policy. This is an incredibly frustrating fact, but makes a lot of sense when you understand the reasoning behind it.

Insurance companies price their homeowners premiums based on how much risk they have to take on by insuring a property. That means that if you live in an area that floods most years, you’re premium is going to cost more than someone who lives in an area that never floods. The logic is pretty easy to follow, but people tend to forget that there are a lot of different climate factors that can raise their risk.

Often the anecdotal disasters that people who live in a certain area tell each other to watch out for is different than what the government believes people need to watch out for. Most insurance companies rely on claim history and government data when analyzing risk in different geographical areas. The good news is that means that people can do their own research before they purchase a property.

If you live in an area that is at risk of things like flooding, fires, hurricanes and tornadoes you can bet that your homeowners premiums are going to go up. If you plan on moving to an area that is considered at risk for any of these disasters, be sure to budget appropriately.

It’s also worth noting that insurance companies will often keep premiums low by offering homeowners insurance policies that include clauses that exclude coverage for natural disasters that are common in that area. This is particularly common for disasters like flooding and wildfires.

The bottom line is that it’s imperative that people looking for homeowners insurance policies take the time to do their research before signing up for any specific policy. Take the time to understand what your policy covers, and what natural disasters are common in your area.

If you have questions about your current homeowners policy, or want to invest in a new one, we encourage you to reach out to TGS Insurance at www.tgsinsurance.com.

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