Personal Finance 1st Edition by Jack R. Kapoor

Exercise 21

1?What major factors influence the cost of home insurance?

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2?What actions can a person take to reduce the cost of home insurance?

Action Application Conduct Web research or contact an insurance agent to determine the natural disasters that occur most frequently in your geographic area. What actions could a renter or homeowner to reduce the financial risk of these natural disasters?

Step 1 of 2

(1) Major factors influence the cost of home insurance:

Following are the factors which affect the cost of home insurance.

Location of home: Location of the house will affect the cost of insurance. The cost insurance will be higher if more people residing in that area have filed for claim.

Type of structure: The type of house and the material of construction will influence the insurance cost. Similarly, age of the house and style of the house will also have influence the insurance cost.

Amount of coverage and type of policy: The cost of insurance will be affected by the policy chosen by the individual and the financial limit. Similarly, the deductible amount of the insurance will also affect the insurance cost.

Other factors like the reputation of the insurance company in which an individual holds the policy and the type of services provided by the insurance company and the discounts that can be availed by the person will also affect the insurance cost.