How do Insurance companies determine quotes for home owners insurance?

Question

How do Insurance companies determine quotes for home owners insurance?

Answer 1

They all do it different ways.

They have the rates calculated by actuaries, and filed with each state insurance commissioner.

As an example, one company (that I used to manually rate for, tells you how long ago that was, LOL), first you figure out how much coverage they need.  You go to the tables for that amount (preferred at that time was $125,000 to $200,000, those were the lowest rates).  Then you pick the construction type (frame, masonry veneer, masonry), then you pick the protection class code (ISO standard).  Then you get the base rate.  Then you add the premiums for any endorsements.  You then apply credits and debits - for unupdated houses, or fully updated, for claims or no claims, for credit score, for deductibles, etc.  

That gives you your final rate.  It's a bit more complicated than that, as some endorsements get added before credits/debits, and some after.

Answer 2

It depends on several factors, such as the coverage amount, age of your home, the materials used to build it, and the area in which you live.  The amount of coverage you need is determined by how much it would cost to rebuild your home if it were destroyed.  Most companies use an appraisal or have a special tool to find this amount.  Some companies also may use your personal history, such as claim history and credit reports to determine the premium.

Answer 3

Help yourself:) You can easily check quotes in internet, for example here: http://home.my-age.net

Every item they asking for are evaluated on their statistic basis, so they estimate probable losses and give you a quote.