Factors affecting your homeowner insurance rate
Your home's value and insurance claim history influence the rate you pay for homeowners insurance, but there are many other factors that contribute to your insurance premium, including:
- Number and type of pets. Unless you live in a state that prohibits this practice, like Michigan and Pennsylvania, insurers may charge you more or turn you down if your pet's breed is on their restricted list. Be sure to explore "pet-friendly" insurance companies, which don't deny coverage based on your pets.
- Claims filed by the previous homeowner. Even if you've been a perfect insurance customer, if your home's previous owner filed homeowners insurance claims, and the cause of those claims has not been addressed, you could end up paying more. It's something to ask about when you buy a home. Request the seller to provide you with a copy of their Comprehensive Loss Underwriting Exchange (CLUE) disclosure information. If the problem has been corrected, make sure your insurer knows this.
- Garage size. Because larger garages contain more valuables, a home with a large garage could be more likely to be burglarized. More risk equals higher premiums.
- Attractive nuisances. Pools and trampolines pose significant risks, especially to children, and their presence will be likely to increase your home insurance premiums.
- Home business. If your business attracts clients to your home, you run a greater risk for being sued by your clients should they become injured on your premises.
- Your location. Even if your claim history is pure as the driven snow, trigger-happy neighbors can cause your rates to rise. Using the CLUE database, insurers can check out everyone near you and you may be tarred with the same brush. Other location-based factors include proximity to a fire hydrant/fire station and the incidence of natural disasters, such as forest fires.
- Credit score. In states that allow this, insurers incorporate credit scoring into their home insurance pricing. While most consumers don't feel that their credit score has anything to do with their insurance risk, insurers can point to statistical data that indicates you're more likely to file a claim if your credit score is low. If you're paying more than you'd like because of a low FICO score, do what you can to raise it -- then shop for a better deal and compare rates on homeowners insurance quotes.
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