Homeowner's and tenant's insurance premium costs are determined by several key factors: 1) Replacement costs of the home, contents, and liability coverage. 2) Location - premiums vary depending on proximity to fire protection. 3) Type of coverage - comprehensive covers more than standard. 4) Deductible amount - lower deductibles increase premium costs. 5) Discounts for claims-free policies, new homes, alarms, and age of policyholder. For examples, a home in Winnipeg with $195k replacement value and comprehensive coverage with a $200 deductible would be $816.20 annually. A home outside Winnipeg within 800 feet of a fire

1. Homeowner's Insurance
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2. Things that could affect the cost of your house
insurance. (5)
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3. Five main factors that determine the cost of homeowners
insurance
1) Replacement Cost
­ building (house)
­ contents (usually up to 70% of the replacement value)
­ outbuildings (shed, garage, up to 10% of replacement cost)
­ additional living expense
­ third party liability (protection against someone being injured on your
property)
2) Location ­ 4 main areas in Manitoba
­ Area 1 Metro Winnipeg, inside the city limits
­ Area 2 Protected, outside city limits but within 1000 ft of fire hall
­ Area 3 Semi­protected, outside area 1 and area 2, but within 8 miles of
a fire hall
­ Area 4 Unprotected, located more than 8 miles from fire hall
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4. 3) Types of Coverage
­ Comprehensive, covers most things, some specific items must be
indicated
­ Broad/Standard, covers only specific perils
4) Amount of deductible
­ the lower your deductible the less you pay if you need to make a claim
­ the lower your deductible the higher your premium
5) Available Discounts
­ claim free
­ new home
­ burglar alarm
­ purchaser is over 50 or 60 years old
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5. Jeric and Allison wish to insure their house in Metro Winnipeg. The
replacement cost is $195 000. What will their premium be if they
decide they want comprehensive insurance with a $200 deductible?
http://www.edu.gov.mb.ca/k12/assess/archives/cm_wt_rp_08.pdf
For a $500.00 deductible premium = $742.00
For a reduced deductible of $200.00 premium increase by 10%
(What is 10% of $742.00)
Reduced deductible charge = (10 ) x $742.00 = $74.20
100
Total premium = basic premium + reduced deductible charge
= $742.00 + $74.20
= $816.20
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6. PJ and Dearly have purchased a home with a replacement value of
$250 000 just outside of Winnipeg. The house is within 800 feet of a fire
hydrant. They want to purchase standard insurance with a $500
deductible. Calculate their annual premium.
http://www.edu.gov.mb.ca/k12/assess/archives/cm_wt_rp_08.pdf
Within 800 ft means they live in Area 2
For a $500.00 deductible premium = $519.00 on first $200 000
+ $ 147.00 on next $50 000
$666.00 Total Premium
For a reduced deductible of $200.00 premium increase by 10%
(What is 10% of $666.00)
Reduced deductible charge = (10 ) x $666.00 = $66.60
100
Total premium = basic premium + reduced deductible charge
= $666.00 + $66.60
= $732.60
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7. Tenant Insurance
Ally has rented an apartment and wants to insure her belongings for
$35 000. She wants a standard policy with a $200 deductible.
Calculate Ally's annual premium.
For a $500.00 deductible premium = $199.00
For a reduced deductible of $200.00 premium increase by 10%
(What is 10% of $199.00)
Reduced deductible charge = (10 ) x $199.00 = $19.90
100
Total premium = basic premium + reduced deductible charge
= $199.00 + $19.90
= $218.90
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8. Assignment #2, Page 21
Questions 1 ­ 7
Hard working Students
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