One of the things that you may have wondered about insurance is whether or not the location of your home affects your rate. To answer that question, it is necessary to look at few different types of insurance. Some of the types of insurance that can be affected by the location of your home are auto insurance, homeowner’s insurance, and renter’s insurance.
Auto insurance is generally designed to provide coverage for bodily injury, medical payments, repairs to vehicles, and repairs to property. Certain locations have higher rates of vehicle theft, vehicle vandalism, and vehicle accidents, and therefore, drivers in those locations will typically pay higher rates than someone living in an area fewer instances of those examples. Since the insurer pays claims for those covered losses, it will charge more to drivers living in locations that will be more likely to result in a claim.
While homeowner’s insurance provides coverage for liability and medical payments, homeowner’s insurance is generally designed to pay for damage or losses to a home caused by fire, lightning, theft, wind, hail, aircraft, riots, vehicles, explosions, and smoke. Depending on the region you live in, you may also have coverage for losses resulting from weight of ice/snow/sleet and freezing of plumbing. Since the insurer pays claims for these covered losses, areas where there are higher rates of these occurrences will typically have higher rates to cover such losses. For instance, areas with higher rates of crime will usually result in higher premiums to cover losses such as theft.
Like homeowner’s insurance, renter’s insurance also provides coverage for medical payments and liability. Renter’s insurance is different than homeowner’s insurance because a renter does not own the structure, so therefore, coverage is only provided for personal property and contents owned by the renter. Renter’s insurance is designed to provide coverage for your personal property in your home (on the premises) and away from your home (off the premises). Your clothing, furniture, electronics, computers, books, and important papers are all typically covered by renter’s insurance against damage or loss cause by fire, lightning, theft, wind, hail, aircraft, riots, vehicles, explosions, and smoke. Since the insurer pays claims for these covered losses, areas where there are higher rates of these occurrences will typically have higher rates to cover such losses. For instance, since it is more likely that covered renters living in area with high crime rates will file a claim for loss of personal property due to theft; the insurer will typically charge higher premiums to renters living in these areas.