Factors that Contribute to Your Insurance Premium
There are numerous factors that can affect your homeowners insurance rates. Seemingly random elements of your home, like the age of your roof, to attractive nuisances like trampolines and swimming pools, may have an impact on the cost of homeowners insurance.
Home Improvements and Changes
Major renovations, home improvements, and even simple changes in your home may have a great impact on your insurance costs. Whether it’s a remodeled kitchen or addition on top of your garage, home improvements and changes often add value to your home. When these changes are made, it’s vital your home insurance policy reflects the true value of your home, so you’re not stuck with exorbitant out-of-pocket expenses after an accident or disaster.
If you have added to the value of your home through improvements or renovations, reassessing your homeowners insurance coverage to reflect these changes is very important. If it was an expensive project, it’s probably expensive for your insurance company to replace it after damage. Therefore, on top of the construction costs of home improvements, your premiums will probably rise, but it will be worth the protection if an accident ever occurs.
Attractive nuisance: that sounds fun. Backyard fun, like swimming pools, diving boards, and trampolines, may make for a child’s oasis, but could seriously increase your insurance premiums. Insurance companies see great risk in covering such toys, that’s because lots of accidents happen on trampolines and in pools.
If someone is injured on your property due to an accident on one of these attractive nuisances, you may be liable for damages—even if you didn’t permit them to participate. Fencing in your pool (which is required by many municipalities, anyway), self-locking gates, and first aid equipment ready on hand, may increase safety in your backyard. Think twice about letting your teenager have a pool party without supervision.
Age and Materials of Your Home
As your home ages, it’s likely to become more susceptible to damage from weather or other natural occurrences—especially your roof. With older homes, replacement costs will increase as the projects get bigger and more expensive. If you haven’t replaced your roof in thirty years, the cost of your home insurance policy will likely reflect it.
If your home is heated with a wood-burning stove, you may see a significant increase in your home insurance premium. This is due to the increased fire risk a wood-burning stove poses to a home.
If you provide your insurance company with proof that your wood-burning stove was installed by a certified contractor, they may decrease your premium for meeting all requirements and codes. If you have a wood-burning stove as a heat source in your home, it is vital to take proper safety precautions, ensuring you have smoke detectors on all levels of your home, and fire extinguishers in easily accessible places. Also, teach your children what to do in case of a fire, and make sure every member of the family knows how to use a fire extinguisher.
Time at Home: Why WFH Could Pay Off
If you work remotely from home or run a business out of your home office, you may be rewarded by your home insurance company.
Insurance companies love when a member of a household is home throughout the day. That’s because rates of burglaries, fires, and other accidents decrease when someone is home, supervising a property at all hours of the day. Plus, if you run a business from your home, your standard home insurance policy will cover the electronics and equipment used for your work. You may be able to deduct the square footage of your home used for your business from your property taxes too.
Keeping Your Life at Home Safe and Secure
Home security systems can be a worthwhile investment in ensuring the safety of your property and family. Installing one of these alarm systems may result in a break from your home insurance company in the form of a cut in your premium. Plus, simple changes like replacing inadequate, weak locks with deadbolts can help you stay safe and reduce your homeowners insurance rate. Now is a great time to add that burglar alarm and dead-bolt locks.
Keeping your roofing and electrical system in good shape, and talking to your city about adding a fire hydrant to your street could also help you lower premiums.
Man’s best friend? Maybe to some, but dog owners may face challenges finding affordable homeowners policies if their dog breed is considered dangerous. Breeds considered aggressive, like pit bulls and rottweilers, can pose a much higher risk for home insurance companies.
According to the Insurance Information Institute, dog bites account for one-third of all homeowners insurance liability claims. More than half of all dog bites occur on a dog owner’s private property, resulting in hundreds of thousands of home insurance claims throughout the United States each year. Protect yourself, your neighbors, your mailman, and your wallet by choosing dog breed wisely.
Insurance companies keep tabs on your claims history. The more claims you file, the higher your premiums may become. If your claims-filing habit is too large, some insurance companies may even terminate your policy, or refuse your renewal request. This is because, with increased claims, insurance companies see increased risk. Your claims history can contribute to your insurance score, a factor insurance providers consider when setting your rates.