Wondering Why Your Home Insurance Went Up?

It is never fun when you go to open your home insurance premium only to find that it has gone up. With the cost of everything else around us rising it can be frustrating. If this has happened to you and you would like to know why before you make the call to your home insurance provider lets first take a look at some factors that may cause such increases.

Your Credit Score Changed

Believe it or not, your credit score has a lot to do with how your home insurance premium is decided. In states where it is permitted, insurance providers examine your credit report for factors that they believe predict the likelihood of filing a claim. In theory, if you have a lower credit score it is believed that your are more likely to file a claim. They consider homeowners with a higher credit score less to be a safer risk and less likely file a claim.

You Run a Home Business 

When you run a home business you usually need a lot of additional items/materials such as computers, filing cabinets, phones, and other office supplies. In order to cover these products in case of a disaster, your premium may be adjusted. If you run a business where there are clients coming in and out of your house, the premium may increase as well. Lets say a client is in your home and slips and falls. Your normal home owners insurance will probably not cover it and you should look into adding business coverage.

You Own a Unique Species for a Pet

If you own a certain breed of dog or an exotic pet this will most likely drive your home insurance costs up because you will need more liability coverage. Since exotic pets are considered wild they are even riskier to own. Since they are unpredictable you are likely to see a huge spike in your home owners insurance in order to cover potential attacks on guests or passersby.

You Built a Home Addition

You have decided to build an addition on to the living room or add that in-ground pool you have always wanted but those additions and luxuries come with a price. Whenever you increase the square footage of your home you are also increasing the amount of money it would cost to rebuild or repair the home or the addition should a disaster strike. If you are installing an in-ground pool, these are called attractive nuisances that usually appeal to children, and can be a hazard since children usually don’t understand certain dangers that lie within having something like this. These attractive nuisances force insurers to view your house as more dangerous therefore increasing the premium.

Your Home is Older

Just as risks increase as we age so does a home’s risks. As your home gets older it is vulnerable to more issues and problems. Lets take the roof for instance, as it gets older the more susceptible it is to damage. According to the Insurance Institute for Business & Home Safety, roof damage occurs in up to 95% of wind-related property losses each year. There is no specific year in which your premium will raise when it comes to the age of your roof but it can occur after about 14-15 years after getting the roof. This also goes for plumbing, electrical, heating and cooling systems. They also become more prone to problems as they age.

Your Location

So obviously your house didn’t pick up and move itself but things around your location might have changed. Maybe the area you are living in has been experiencing damaging thunderstorms, or more harsh snow storms causing claims to rise. Another factor that could cause a rise in your premium are building costs. If build costs are increasing in your area then it would be more expensive to repair or replace your home should something happen.

Understanding all of the factors that go into determining the premium for home owners insurance will hopefully explain why your premium may have gone up. It is always important to call your home owners insurance company to determine the exact reason if you are concerned about the increase. If you have any other questions regarding a home mortgage and would like to speak with someone, we would love to hear from you! Contact us here for more information.