Common things that increase your Home Insurance rate

 
Things that increase your insurance rate

Many homeowners assume that their insurance premiums are calculated solely based upon the value of their home, but this generally isn't the case. Here, we'll review some common things that can increase your homeowners insurance rate and why!

For additional questions about your specific insurance policy and needs, please contact your Local Insurance Agent who will be happy to help!

Swimming Pools

While pools can be great for cooling off on hot days, they can also represent a safety hazard. As a result, having a pool can increase the amount of liability coverage necessary as well as your overall premium cost. In addition, insurance companies will often require fences and appropriate gates be installed to prevent children, pets, and unauthorized persons from getting into the pool area and potentially getting hurt.

Tip: You can take action to keep your insurance premium down by taking steps to prevent unauthorized persons from gaining access to your pool and prevent visitor accidents. Your insurance premium will increase if you have a liability claim on your property. To prevent any such claim, I would suggest always locking your gate and having rules for visitors around the pool, such as no diving, running, and horseplay. Personally make sure all visitors are aware of these rules and also post those rules where they are clearly visible to anyone who enters the pool area. Make safety a priority on your property and have a fun and safe backyard!
 
Trampolines

Though the kids will love it, your insurance company may not! Due to the potential for injury, having a trampoline increases the chances of someone getting injured and will increase your liability premium. In order to reduce the chances that someone may get hurt on the trampoline, your insurance company may require that you install a net around the trampoline or take other safety measures.

Tip: To avoid issues with underwriters with your home owners' policy, here are two items you should invest in upon purchasing or if you already have a trampoline in your yard. These items not only will keep your children safer but help protect you from a potential claim should someone try to use your trampoline when you are not at home. A trampoline safety net a safety net locking system can be purchased at any big box retailer or sporting goods store or from any major online shopping website such as Amazon.com or Ebay.com. "An ounce of prevention" is a really great approach to trampolines to avoid a cancellation notice or a dreaded remedy letter from your insurance carrier.

Extra Tip: The safety net posts are often covered in a very thin foam and covered in plastic that usually deteriorates very quickly with changing weather and temperatures. Purchase larger size pool noodles at your local dollar or discount store and cut them lengthwise on one side and put them in place of the post covers and attached with several plastic zip ties on the outside of each post and cut off the extra slack to avoid any possible injuries. These are much thicker and softer than the stock covers should a child bump into a post and very inexpensive.
 
Dogs

Even though studies have disproven claims that specific breeds are more dangerous than others, some insurance companies may ask that you reconsider certain breeds such as akitas, pit bulls, rottweilers, and german shepherds. Regardless of the breed that you have, the insurance industry reports that their costs related to dog bite claims has been increasing on average 16% per year, so this may have a rather significant effect on your premium.

Tip: Everyone loves their dog, but who would think that owning a dog has anything to do with your homeowner's insurance? Most people don't think about what might happen if their dog bit someone, but the liability coverage from the home insurance would provide coverage for a dog bite. For that reason, it is crucial to carry a high limit of liability if you are a dog owner.

While owning a dog or a particular breed does not directly have an effect on your insurance rate, it can be a factor in your home insurance. Insurance companies don't charge more if you own a dog, but some breeds can be tricky to insure. Regardless of the breed of dog you own, having a dog puts you at a higher risk for a claim. Claims from dog bites can be costly and problematical. If you own a particular breed like a German Shepherd, Akita, Rottweiler, or Pitbull, some insurance companies may not choose to write a policy.

That doesn't mean that insurance companies hate dogs! Many agents and underwriters, including myself, own a dog. If you have a dog, make sure you tell your insurance agent, and take a look at your liability coverage on your home insurance policy. Your agent will know how to make sure you are protected in the case of a claim. Dogs are a man's best friend! Give your agent a call with any questions about your coverage and give your dog a pat on the head when you go home!
 
Renting

If you rent out your place for longer than 90 days you may be considered a business and your home policy may not cover you. In cases where you have a property that you are renting out, it is likely that you will need special Rental Property or Landlord insurance that will cover damages that may occur at your property as well as lost rental income that may result! It is important to keep in mind that a Rental Policy does not protect your tenants or their belongings, necessitating their own Renters Insurance Policy. As an added bonus, many insurance companies offer discounts to Landlords who have tenants that maintain their own Renters Insurance policies.

Tip: Contact your Insurance agent in the event you are no longer residing in your home. Home policies provide property and liability coverage for "your" dwelling at the "residence premises." "Residence premises" is defined by the policy as the dwelling in which "you" reside. Failure to notify your agent and or insurance company may jeopardize your coverage.
 
A Home Business

If you are operating a business out of your home, you likely have business specific equipment such as computers, scanners, printers, filing cabinets, photography equipment, inventory, etc., which may not be covered in the event of damage to your home. That can add up to a lot of things that are at risk in the event of a burglary or Fire that may ultimately be your responsibility to replace. A home business may require separate coverage to cover the business and property owned by it.

Tip: Most homeowners insurance companies offer an endorsement for business in the home for office type exposures (accounting, etc) that offer an increase in business property to a higher limit than what the homeowners policy will provide normally with property associated with use in business. In addition, liability will extend as well for clients coming to a home office. Both the property and liability exposures are distinct and not usually covered unless this endorsement is chosen on the homeowners policy.

If there is more exposure than what an endorsement would cover, it is best to consider an office/commercial package for the property, liability and loss of income exposure. The business in the home endorsement is usually for incidental type exposures where the "foot traffic" is more minimal and there is not a great need for a high property limit.

 
Luxury Items

While the average homeowners policy provides adequate coverage for most of your content items, high value items may require itemization or additional coverage. Engagement rings, artwork, and your baseball card collection are all things that may necessitate additional coverage to ensure that you are properly insured in the event of damage or theft. These types of things should generally be listed specifically on your policy together with their appraised value.

Tip: If you have a higher valued item or higher valued collection that you aren't sure is covered, check with your insurance agent to find out. Some items that may have special limits but aren't commonly thought of are larger tractor equipment, guns, silverware and collectible coins, among others. Ask your insurance agent what coverage your policy provides, then do an inventory of your special items to determine if you need extra protection. You may need appraisals for certain special items. It's most cost effective to allow your policy limits to cover some smaller items with the protection already provided, then you only need to get a few appraisals on the larger items.

Another hint: The larger your deductible, the lower the cost of your insurance policy. Choose the highest deductible you are comfortable with on your luxury items to maximize your savings.
 
Previous Claims

A homeowner that has reported a claim previously is perceived as representing a higher risk to insurance companies, resulting in higher premium costs. Depending on the insurance company, they generally take into consideration claims reported within the last 3 to 5 years, so that Pipe Break, etc. that you reported will eventually be forgotten. Homeowners that report multiple claims will generally see the highest increase in their premiums and may even find that their insurance policy is not renewed.

Tip: Believe it or not, it is not the big claim that affects your premium as much as the small claim or claims may. Small claims are considered maintenance issues. Take a look at your deductible. Most deductibles these days are $1000. You not only will save on your premium by increasing your deductible you will avoid the maintenance type of claims.

 

While finding out that your insurance premium has increased is never great news, often it's the result of your insurance company ensuring that you have the adequate coverage for your changing needs. Always discuss any changes to your home and life with your Local Insurance Agent to ensure that your policy meets your current needs.

We hope that you found this helpful! As always, if there is anything that we can assist you with, please don't hesitate to Contact Our Offices!

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