Little-known factors about homeowners insurance rates that can affect your premiums

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Published Date 3/19/2019

You can judge a house. You can judge a neighborhood. But how can you predict how high your homeowner’s insurance might be at first glance when buying a home? Insurance rates can be made up of a complicated set of data points, but it’s important to know which variables can affect your insurance rates.

RealtyTimes’ Paul Martin, an insurance professional, recently wrote about the overlooked factors that affect insurance rates that few of us take into consideration. The first one is the age and condition of your house. “This is one of the most obvious factors and also one of the biggest,” says Martin. “The age of your house and the wiring, pipes, roof, lumber, square footage, and even how many corners it has all play a role in the price of your insurance.” He goes on to say how it comes down to the risk associated with the house and the costs that come with repair or replacement. Older homes may have old pipes and wiring that are no longer up to code, representing a much higher risk of damage or fire. The result? Insurance companies will charge more to insure it.

It can cost you if you live in a flood zone, where the risk of destruction is high. If you have a beachfront home or one near major waterways, you can expect to pay more than if you’re in an area of the country where flooding is typically not a concern. “If you’re in any sort of flood zone and you have a mortgage on your home, your lender will probably require a separate flood insurance policy—and that costs money,” says Martin. “Even if you aren’t in a flood zone, your mortgage company may still require coverage, so be sure to look into your lender’s requirements when you begin shopping around.

You’d never think your pooch would be a factor for insurance rates. But sometimes it is. “In some cases, your family dog can bump up your premiums. Certain breeds, such as pit bulls and “bully” breeds, have a reputation of being more dangerous than others and historically come with larger liability concerns to your insurer, resulting in a higher rate,” says Martin. He explains how three things can happen if your dog is considered a “dangerous” dog breed. (1) you could be charged a higher rate from your carrier (2) your provider may cover you but exclude any liability associated with the dog, or (3) the carrier could decide not to insure you at all.

What else can lead to more liability that results in higher premiums? Pools, trampolines, and even backyard construction projects are considered “attractive nuisances” — recreational amenities added to a home that can raise your rates if the insurance company knows about it. “If there is something in your yard that can attract the attention of a minor and pose any level of danger, it will probably affect your insurance policy,” says Martin.

Last but not least, how far is your home or potential home from the nearest firehouse? How long would it take for the local fire department to get there? The faster they can get there and handle the situation, the better chance they have of minimizing the damage. “Every homeowner’s policy requires what’s called a Public Protection Class (PPC) rating,” says Martin. “A PPC is rated between 1-10 (one being the best) and takes factors like proximity to the fire department, proximity and number of fire hydrants, municipal water towers, and even railroad tracks into account.”

So can you actively make changes to help lower your rates? You can, but Martin warns homeowners to never lie or intentionally exclude key information on your homeowner’s application, information that could result in your coverage or renewal getting denied. “Be honest with your agent,” he says. “He or she will help you find the right coverage and rate that works for your needs.”

Source: Realtytimes, TBWS

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