6 FACTORS IMPACTING YOUR HOME INSURANCE RATES

TRAMPOLINES

While trampolines have traditionally been a back yard staple, insurance companies are beginning to take a stand against them. Virtually all of them surcharge for maintaining a trampoline, but it is becoming much more common place for insurance companies to decline writing your insurance at all if you have one!

Why? According to a recent Huffington Post article, The Number of Trampoline-Related Injuries is Higher Than You Thought, over 1 million people visited the hospital for trampoline related injuries between 2002 and 2011. While injuries to you or your kids would not be covered under a homeowners policy, injuries to guests almost always result in suits over liability for their related medical bills. Check out this attorney’s site detailing a $65,000 settlement for a broken arm (link)!


POOR CREDIT SCORE

Over the last several years, insurance companies have started to use a credit based scoring model that significantly impacts your home insurance rates. As you can imagine, those with the best credit scores receive the best pricing and those with poorer scores can see the cost of their insurance rise significantly.

Why? Insurance companies have been able to show Departments of Insurance across the country that there is a very strong correlation between credit score and claims. Those with lower credit scores are more likely to defer maintenance on their homes, turn in smaller claims that other homeowners might pay out of pocket, and report items missing or stolen.


YOUR PETS

Few people understand or agree, but the animals that you maintain at your home can impact your insurance rates and eligibility. Most insurance companies list certain breeds of dogs that they will not even offer home insurance to the owners of those breeds. Those breeds often include Pit Bulls (or mixed breeds of the same type), Rottweilers, Doberman Pinschers, German Shepards, Akitas, Chows, Presa Canarios, Alaskan Malamutes, and any dog that has had a biting incident in the past. Other animals such as horses, cows, other types of livestock, or exotic pets such as snakes, can impact your insurance as well.

Why? The liability portion of your policy would provide you for protection should someone sue you for the act of your pet. In 2013 alone, dog bites cost the insurance industry $483 million with an average dog bite claim costing $$27,862, according to an Insurance Information Institute study with State Farm (link).


THE CONDITION OF YOUR HOME

In 2011 and 2012, home insurance companies lost enormous amounts of money. As a result of these losses, they began to doing drive by inspections of both their existing customers and all new customers. If they drive by your home and see that it is not being maintained, they are likely to give you a list of demands to fix or face cancellation.

Why? Deferred maintenance leads to claims. Failing to replace an old roof results in water leak claims. Paint that is chipping away, especially around windows and doors, can cause wood rot and mold to form. It may not be that a claim is eminent, but failing to maintain your home says to the insurance company that you believe that it is their job to fix your home, when in reality, insurance is designed for catastrophic and unpreventable losses.


MULTIPLE CLAIMS

Claims frequency has a very large influence on your home insurance rates and eligibility. Types of claims that typically draw the most scrutiny are thefts, water damage from pipes or appliances, fires, and mold claims.

Why? The average homeowner files a claim once every 8 years. Therefore, if you are filing claims more frequently than that, you are more of a risk than the rest of the population. Further, the types of claims we listed above either create worries about future related claims or are perceived as preventable losses.


FIRE PROTECTION

Every home in America is given a fire protection rating which strongly influences the price of your insurance. More specifically, how far is your home from the nearest fire hydrant and how far is it from the nearest fire department? If your home is more than 1000 feet from the nearest hydrant or more than 5 miles from the nearest fire department, your insurance could be significantly higher.

Why? Most home fires are not total losses of the home. However, once your home gets outside of those parameters, the severity of fire losses to your home drastically increases.


Now that you are armed with this new knowledge, you can put it to the test. If you have not reviewed your insurance in several years, you may want to make sure that these factors have been reviewed. Perhaps there is a new fire station that was just built in your neighborhood. Or maybe you have not had a claim in several years. To see if any of these items are impacting your insurance, you can get a free comparison below.