8 Things that can affect your homeowners insurance rates
It’s highly important to review your insurance coverage on a regular basis so you can be sure your coverage keeps pace with the cost to repair or rebuild your home and replace its contents, including any upgrades you might make over time. While this could lead to higher premiums, it helps you to be more adequately insured and less vulnerable to high out-of-pocket expenses.
Here are some of the things that can affect your insurance and the premium you pay:
1. Home remodelingSince you’ve moved into your home, you may have remodeled the kitchen, updated the bathroom, or made other improvements. If you have added to the value of your home, make sure your homeowners insurance coverage takes these new improvements into account. It’s expensive for you to build, and it’s expensive for the insurance company to rebuild in case of a loss. Materials and construction costs will be taken into consideration and it may increase your premium, but at least your coverage will be up to date.
2. Pools and Trampolines (known as attractive nuisances)Your backyard pool may be relaxing and the trampoline fun for the kids, but they can also cause your insurance premiums to increase. You may be liable if people are injured while using them, whether you gave them permission or not.
Tip: Keep your pool secure with fences, install self-locking gates, and keep safety equipment readily accessible. Consider putting a net around your trampoline to reduce the chance of injury.
3. Age of house and roof – and materialsAs your home and roof age, they could become more susceptible to damage from weather elements or even internal deterioration. Replacement costs, including material and labor, go up over time.
4. Wood-burning stovesIf you have a wood-burning stove, you could limit potential premium increases by providing your insurance carrier with proof your wood-burning stove was installed by a licensed contractor and meets code requirements.
Tip: Install smoke detectors on all levels of your home. Additionally, keep a fire extinguisher in an easily-accessible location and make sure everyone in the household knows how to use it.
5. Home-based businessesIf you work from home you may need coverage for equipment and electronics, business vehicles, and inventory stored on site. Standard homeowners insurance may provide some protection for business equipment, but coverage varies by policy and may not be enough. In addition, having customers coming in and out of your home can present liability and property loss risks that homeowners policies may not cover. Consider adding an endorsement to your homeowners policy or purchasing a business owners policy.
6. Home security and safetyHome security systems may help reduce your premium plus add an extra layer of protection for you and your family, your home, and your belongings.
Tip: Replacing old locks with new systems (including deadbolts), along with installing and activating a monitored home security system, could reduce your homeowners insurance rate.
7. Dog bitesDog owners may face limited or no coverage if their pet’s breed is considered aggressive. Did you know that more than 50 percent of dog bites occur on the owner’s property and they account for a third of all homeowners insurance liability claims?
8. Previous claimsThe more claims you have, the higher your perceived risk to insurers. This can not only lead to higher premiums but also the risk your insurance company may drop or not renew your policy.
What you can do?Contact your insurance agent and review your coverage every year. In addition:
− Consider combining your policies. Many insurance companies offer discounts for bundling policies.
− Purchase umbrella liability insurance to protect yourself against claims that may exceed your current coverage limits. Umbrella policies generally offer $1 million or more in additional coverage at reasonable rates.