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Factors That Could Drive the Cost of Your Homeowners Insurance

Homeowners insurance rates are calculated with your house in mind¬—from your roofing to your hot tub to the breed of your dog. It’s important to know which facets of your property influence the cost of your premiums so you can keep your home as safe as possible and save money at the same time.

1. Credit history. In all states but California, Maryland and Massachusetts, your credit history and insurance score can be used to determine the cost of your homeowners insurance. In many cases, these can be the primary factors that play into your premium. Pay back credit card debt in full every month to potentially save over $1,000 annually on insurance.

2. Condition of your house. The overall age and condition of your home could be impacting your premium. Older homes, or homes with older roofs, are more likely to be damaged by weather and tend to incur higher insurance costs. Old features also increase the price of your insurance because they are more costly to replace and repair in the event of damage. Replacing old roofing or updating out-of-date parts of your house can help you save in the long run. If you do renovate, make sure to reach out to your insurance agent to confirm that your current policy still covers the increased value of your home.

3. Claims history. Every claim you have filed, even involving other properties, is considered when determining the cost of your new policy. A history of previous claims suggests future claims, so insurers tend to view customers with past claims as risky to insure. Make sure to follow recommended safety protocols at home to avoid serious damage that would result in filing claims.

4. Extra features. Substantial add-ons, such as pools, hot tubs, trampolines, sculptures and wood-burning stoves, often tack on extra dollars to your homeowners insurance. These features add both value and risk to your house, so it’s important to make sure that you account for them in two ways. First, make sure you take all necessary safety precautions, such as fencing in your pool or installing smoke detectors close to your wood-burning fireplace, to minimize the risks of these features. Additionally, remember to talk to your agent about the value that these amenities add to your house to determine if you need to expand your current insurance coverage.

5. Security measures. The crime rate, population and location of your neighborhood can play a part in your insurance rates. Installing home security systems, such as smoke detectors, deadbolt locks and a burglar alarm, increases the security of your property and can lower your premiums.

6. Living on or near the coast. Bodies of water are beautiful to live by but pose serious risks of water and wind damage from hurricanes and flooding. Living near the coast also tends to raise insurance rates, so buying flood insurance is an excellent option to protect yourself in the event of a natural disaster. Remember that the average homeowners policy does not provide coverage for flooding. Flood insurance is available through government programs. Talk to your agent for details.

7. Breed of your dog. Surprisingly, your dogs could be a reason your homeowners insurance is so high. The Insurance Information Institute reports that nearly $800 million worth of dog bite-related claims were filed in 2019. Insurers tend to view “aggressive” dog breeds as risky for that reason. If you have a pit bull, German shepherd, rottweiler or husky, you may want to consider pursuing training classes for them. If insurance providers see proof of this, it’s possible that your premiums could go down.

It’s never a bad idea to raise your deductible, which is the amount you are responsible for paying before your insurance company covers the costs of damage to your home. The Insurance Information Institute reports that doubling your current deductible could result in a 25% decrease in the cost of your insurance. Buying endorsements or expanding your coverage to match the current state of your property is essential to protecting your home and saving money on premiums every month.

While these tips can help protect your pocketbook, remember that your main goal is to protect your home. One of the biggest investments you may make in life is your house, and homeowners insurance is essential to keeping it properly protected. Talk with your independent insurance agent for expert advice on quality coverage for your home. Your agency will work with their carrier partners to find the coverage you need at a price that fits your budget.