Just like real estate itself, the cost of adequate home insurance can vary, according to a property’s location and the perceived value of the residence and its contents. But, there are many factors that define the insurer’s value. It is calculated by sophisticated actuary formulas that may not align with recent market activity. Insurance companies also weigh risks, such as whether or not a home is renovated or passes a safety or security inspection – as well as lifestyle choices like smoking. Insurance rates can also be affected significantly if the home is used for business purposes. For example, recent years have seen many homeowners (and renters) create income from their residence.

Perhaps the most obvious way homeowners are generating revenue from their homes is through agency-run offerings of private homes to guests for short-term B&B-type rentals. Clearly, renting your home to strangers has insurance implications, but what about the implications of a self-employed baker or multimedia artist operating from home? Equipment and materials like flammable oils or paints could present an unusual household hazard that insurers need to know about. Whatever your circumstances, the most important insurance factor for a homeowner is providing full disclosure of information to ensure proper and fair coverage and thereby expedite eligible compensation and avoid disputes or disappointment.