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All insurance policies are formed by calculating a number of factors related to risk. Every insurance agency analyzes these risks in an attempt to figure out how likely it is for a client to make a claim, and how much that claim will cost. There are different factors for car, home and business insurance. This article is designed to familiarize you with some of the factors that most companies take into account when calculating home insurance policies.

Where you live
This factor covers information about the claims that were filed in your neighborhood. It shows what are the most likely causes for an insurance claim. For example, if the people in your area go to work at the same time and leave their houses unattended, there is a good chance of break-ins. The cost of the insurance therefore varies from area to area.

Water proximity
Home Insurance in Southeast Orlando, FLFire is one of the most common reasons for insurance claims, therefore it is a major concern for every insurance agency. It is important to know how far the house is from a source of water – for example, a fire hydrant. If a potential house fire can be put out fast, the lower the cost of restoring your home.

Replacement Cost
This factor is perhaps the most important of them all. It covers the size and composition of your home, as well as its contents. Naturally, the bigger house you have and the fuller it is, it will cost more to replace it. The agents also take into consideration the quality of the construction.

Heating Systems
Oil tanks are capable of causing horrible property damage, that is why it is important to know their age and condition. The risk is significantly smaller with forced air gas furnaces or electric heating. That is why you might have to pay more if you have an oil tank.

Pipes
If you have galvanized or lead piping, this means that your plumbing system is old. Old plumbing systems have the tendency to cause problems – burst pipes, leaks and other. Insurance agencies generally favor homes with modern plumbing – such as copper or plastic.

Wood Stoves
The biggest source of house fires and carbon monoxide poisoning. This is likely to happen if they are not properly maintained or installed. Such wood stoves will definitely be the object of inspection by the insurance companies. If you plan on installing such a device, or buying a house with one already installed, make sure you have a word with your insurance representative.

Those were some of the factors that insurance agencies take into considerations when calculating the risk for home insurance. Of course, there are others, which we will look into next time.

We are Nationwide Insurance – Barfield Insurance, a reputable insurance agency operating in Orlando, FL and the surrounding area. Do not hesitate to call us with all your home, auto and business insurance needs! Contact us now at (321) 332-7090!