Home insurance will pay to replace the structure of your home, as well as cover emergency accommodations if you’re temporarily unable to live in your home. Depending on your policy, your insurance will also pay to replace your home’s contents, including items like furniture, electronics, clothing, jewelry, and more. Home insurance does not reimburse policyholders for the market value of the home. Insurers only contribute toward the cost of rebuilding the structure using comparable materials.
There are many factors that contribute to the cost of home insurance. Here's a few to start:
- Your home’s proximity to a fire hydrant or fire station.
- The structural integrity of your home.
- The age of your home.
- Whether you have a security system installed.
- Your insurance claims history.
- The age and quality of your home’s plumbing system.
- The state of your home’s electrical system.
Policy type, as well as your insurance and claims history, is another factor. You’ll qualify for a low rate if you’ve had a policy in the past, have been diligent about renewing it before the expiration date, and have never filed a claim.
Insurers in Nova Scotia are allowed to use your credit score while calculating your premium. The argument is that the lower a person’s score, the more risk they present and vice versa. Not every insurer will ask to see your credit score, though.
Another detail that consumers overlook is the company’s risk pool. Each insurer has a different tolerance to risk. Some are conservative and have stricter underwriting standards. That makes the company more likely to offer coverage to people who are the least likely to file a claim. If you have a long history of claims, you’re likely not the target consumer, and you’ll be charged a higher premium than the insurer’s ‘ideal’ customer.
How do you find out which insurer is right for you? Your insurance agent can guide you toward a more lenient insurer. Another good place to start is to compare rates — you’ll immediately be able to see the spread between premiums.