Purchasing a home is a significant and exciting life event. It's also an investment that's worth protecting with a homeowners insurance policy. While many providers are available to suit your needs and budget, they all use the same general factors to determine monthly costs. Learning how your rates are determined can help narrow down your search area and increase your savings. 

How Do Providers Determine Your Homeowners Insurance Rates? 

1. Home Location

Both state and local factors play a significant role in homeowners insurance rates. Providers research the home's zip code for its recent history. In general, homes in suburban areas have less expensive rates than the ones nearer to cities. Insurers will also lower rates if the home is located near a police or fire station. The proximity can mitigate an emergency's impact on the property. 

2. Replacement Cost

The value of a home is partially determined by its square footage, design, and construction materials. Additionally, special features, like a pool or fireplace, increase the value. However, the more valuable the home, the more it will cost to replace. While a total loss may not be likely, providers account for all possible outcomes. The home's value may make your rates somewhat higher, but you'll have coverage if the unexpected occurs. 

3. Credit History 

Both mortgage lenders and homeowners insurance providers measure risk to determine their rates. They will check on an individual's credit score and history for background information. Potential homeowners with good credit are at a lower risk and can be rewarded with lower rates. According to insurers, people with a positive credit history are also less likely to file a claim. In turn, they reward policyholders with a discount.

However, individuals with lower credit scores can still get approved for homeowners insurance. Improving the score lowers both their risk and rates over time. Using secured credit cards and changing payment strategies will improve your score quickly. Additionally, asking for higher limits can increase your score over time.

4. Security Features

Homes with secure locks can reduce the provider's risk assessment and decrease your rates. Providers also lower costs if the home has a security system or alarm connected to the authorities. Since there are many ways to secure a home, contact your homeowners insurance agent. They can detail which features provide the most savings. 

Additionally, insurers appreciate that homeowners will enhance their property over time. Even if the home doesn't have advanced security systems at purchase, adding the features can earn you future discounts. 

Farmers Mutual Insurance Association Of Osceola County was founded in 1889 to specifically protect farmers. Through their positive reputation, they expanded their coverage to homes, so more northwestern Iowa residents could benefit from their services. As an independent insurance agency, they can match you with a customized plan from the top providers in the country. By having access to insurers' rates, you'll find the right policy to match your budget. For more information on their homeowners insurance products, visit their website. To speak to one of their knowledgeable agents, call their Sibley location at (712) 754-3654.