Homeowner Insurance Premiums
Managing Your Home to Control Your Rate
Once you understand your insurance company 's rating philosophy, you can manage your home to better control your homeowner insurance rate.
You are the CEO of your home. Just like running a large corporation, you can manage your home in such a way to help reduce your homeowner insurance premiums. First you need to understand the rating and underwriting philosophy of your homeowners insurance company. Part of that understanding is realizing that you are in a partnership relationship with your insurance carrier. You both want the best for your home. You want low premium and superior coverage while the insurance company wants to insure a home with a low probability of loss.
Here are a few tips for managing your home that will help to reduce your homeowner insurance rate:
- Age/Upgrades: Although companies like to insure brand new homes, don't despair if you have an older home. Updating your plumbing, electrical and heating and/or air conditioning systems to prevent fire or unwanted leaks. Upon upgrading these systems, be sure to contact your homeowner insurance agent and provide the appropriate proof of upgrade to receive your premium credit.
- Smoke/Carbon Monoxide Detectors: In many states, it is state law to have a functioning smoke and carbon monoxide detector. If it is not mandatory in your state, it would behoove you to install a few. They're not expensive and having them in your home not only protects you and your family, it also shows your insurance company that you are serious about preventing losses. Ask your agent how much of a premium savings purchasing one of these devices will earn.
- Burglar/Sprinklers: If you have installed a sprinkler system, burglar alarm or even have a functioning fire extinguisher, advise your agent. These protective devices all serve to help decrease your rate. Remember, insurance companies do not want to insure what is likely to happen. With these protective measures, you have reduced the likelihood of your house burning to the ground.
- Pool/hot tubs: Depending on what region of the country your house is located; pools and/or hot tubs may or may not impact your premium. There are many factors such as whether it's an above or in ground pool, whether it has a diving board and whether or not is located within a fenced and locked enclosure. If you're thinking of getting a pool, talk with your insurance agent regarding the premium impact of installing a pool. If you already have one, discuss the measures necessary to adequately mitigate the additional risk with your homeowner insurance agent.
- Dog Breed: Before you run out to purchase an exotic wolf mix or a pitt bull, you might want to check with your insurance agent. Certain breeds will either cause your insurance company to cancel coverage or increase your insurance rate.
- Trampoline: States like Michigan, Texas and Massachusetts have definite opinions on trampolines. A trampoline may be a reason for your insurance company to deny coverage or to significantly increase your premium. Talk to your agent first.
The items outlined above are items that you, the CEO of your home, have control over. Whether or not you choose to go through the expense to upgrade your home's electrical and plumbing systems is your decision. Think of it as an improvement to your home rather than a ploy to reduce your insurance rate.
On the other hand, when your child asks for a trampoline or a Pit Bull or Wolf hybrid, you might want to think twice. Your ongoing relationship with your insurance carrier may be at risk.
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