These 5 Common Things Could Raise Your Home Insurance

Homeowners Insurance

Don’t get caught off guard. Know what things around your house can increase your homeowners insurance costs (photo credit: BigStockPhoto.com)

During the housing market crash of the past few years, home values took a dive as many families struggled to keep their homes. As home sales begin to rise, people are being much more careful in weighing cost options when they purchase. Homebuyers traditionally shop for a new home based on local schools or getting the most square footage for their dollar. Ironically, as buyers seek to save money on the purchase, they tend to overlook some important factors that can increase their home insurance costs, potentially costing them far more money over time.

Here are five things commonly found around a house that can actually raise your home insurance premiums. 

1.   Fun and Games

Most families want to have fun at home. But fun things can raise your home insurance premiums. Many families have items around their home that insurance companies view as a liability because they could potentially put them- or their children- at risk.  Surprisingly, having a dog could be one of your greatest liabilities. Dog bites account for almost one third of all home insurance claims. Some other items around your house that could raise your home insurance rates are having a trampoline or having pool with a slide and/or diving board.

2.  Credit Score

It is always a good idea to pay close attention to your credit score. But, most people do not realize that having a low credit score can actually raise their insurance rates. Over the years, insurance companies have found that a person’s credit score is a highly accurate predictor of their level of risk.   

3.   Age of Your Home

Another factor that can raise your home insurance premium is your home’s age.  A standard rule of thumb is that if the home’s roof or plumbing has not been updated in 25 years, your insurance premiums will be higher. Owning an older home with outdated construction could increase your insurance rates because of the level of risk associated with it. Old roofs can leak during rainstorms, causing expensive water damage. Outdated plumbing can lead to pipes bursting, creating expensive repairs to replace the ceiling, walls, and/or flooring. Even outdated electrical wiring puts a home at a greater risk of fire. So, be sure when buying a home to take into account the age of the home and ask what updates have been performed. Many federally sponsored rebates and insurance discounts are available to homeowners when they install new, energy efficient products in their home. 

4.   Claim History

Does your home have a history of insurance claims filed? If so, that can also raise your home insurance rates.  Insurance companies look at the insurance claim history on your home at the time you are purchasing the home, using a system called the Comprehensive Loss Underwriting Exchange (C.L.U.E.). Any claims filed for a property are stored for seven years in this system. When you apply for insurance, the company looks at the claims history for that property, up to seven years before you moved there. If there is a history of claims, your homeowner’s insurance rates may increase as the property could be seen as being at an increased risk.

5.  Neighborhood

When buying a home, you often hear real estate agents say “location, location, location!” When it comes to insurance rates, location matters, too. If the homes in your neighborhood suddenly have an increase of insurance claims from such events as burglary, fire, or weather, you could see your premiums rise despite having never filed a claim.

If you are considering moving to a new (to you) home, or would like to shop the rates of your existing homeowners policy, the insurance professionals at TAG Insurance and Financial Services would love to assist you in getting estimates for the properties you are considering.  You can give us a call or fill out a form and request a quote online today!

January 17th, 2015 by TAG Insurance and Financial Services, Inc