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Every year, millions of Americans may call their insurance agents to inquire about why their premiums are on the rise, and this reveals a truth about many people across the country: They may have insurance policies to protect them financially, but they often don't know what it is they're actually paying for. For this reason, it's important that agents take the time to explain the ins and outs of whatever coverage their clients have, and also walk them through the various issues that might end up impacting the price they pay for coverage every month.

There are many things that impact the cost of home insurance, but perhaps the biggest is the geographic area in which a house is located, and the value of its land, according to a report from the National Association of Insurance Commissioners. Another major factor, though, relates to how much risk a property faces when it comes to being hit by a catastrophe. That can include flooding, tornadoes, hurricanes, earthquakes and volcanic eruptions, and any of these issues would likely lead to the necessity of taking on additional coverage above and beyond what many other homeowners have to buy.

Other factors
Other conditions - such as the actual structure of a building itself, the population density in a home's area, economic factors including inflation, and even the regulatory environment in a given state - will also have a huge impact on cost when added together, the report said. Fortunately, the more consumers know about what impacts their rates, the better off they're likely to be in terms of understanding the price increases they have to face when they happen.

The more insurance agents can do to make sure their clients understand their policies, and what they're paying for, the better off both parties are likely to be. For consumers it will give them the power to make more educated decisions about adding or changing their plans to better fit their unique needs, while agents get the benefit of a better customer service relationship. In fact, polls show that consumers actually prefer good customer service even over the ability to save a bit of money on their coverage. That, in turn, could lead to higher retention rates and even recommendations from satisfied customers to friends and family about the benefits of working with their specific agent.

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