10 risk factors for homeowners insurance policies
Customers buy insurance to minimize their risk and make them whole should a covered loss occur. What many may not understand is that a number of factors can cause their premiums to skyrocket before a covered peril even occurs. Adjusters and claims managers handling the ensuing claims also need to be aware of these possible red flags and their impact on any settlements.
As reported by PropertyCasulty360.com, here are 10 factors (not in any particular order) that can make a homeowner’s property a greater risk to insure.
1. Pets
Not every dog is man’s best friend and some insurers don’t take kindly to all breeds. Owning a German shepherd, Great Dane, Siberian husky, Doberman, rottweiler, pit bull, Akita or any other dog that could be considered aggressive could raise insurance rates. “This isn’t only limited to dogs, as exotic animals such as tigers, monkeys and others may cause rates to be high, if you can even get insurance,” says insurance expert Chris Tidball.
2. Bad credit score
Insurers will look to see if a homeowner has paid her bills on time and check credit scores. A lower number could result in higher premiums.
3. Location, location, location
Just like in real estate, the location of the home really does matter. Owners of homes located in Tornado Alley, along coastal Florida (or any coast for that matter), in a hurricane-prone state or in an area known for sinkholes can expect to pay more for homeowners’ coverage.
4. Trampolines
Although exercise is important, some exercise equipment can impact insurance rates. Trampolines result in approximately 92,000 hospital visits each year. Parents frequently are unaware that they cause spinal injuries, fractures and head injuries. Most injuries are not caused by children flying off the trampoline, but because one child lands on another when they are jumping or they try something silly like riding a bike and jumping. Doctors recommend that only one child at a time be on a trampoline with adequate supervision.
5. Swimming pools
Another source of higher homeowner insurance rates involves swimming pools. According to Parents magazine, drowning takes more than 1,000 lives a year and more than half of these events take place in the children’s own home and one-third take place in the homes of friends and relatives.
6. Fire concerns
Location also matters when it comes to fire stations. Living too far away from the local fire hall or a fire hydrant could raise insurance rates. Of course, a neighbor’s pool could be a source of water in an emergency, as well as a nearby pond.
7. Poor maintenance
Owners who don’t keep up with their home maintenance may see their rates raised or their homeowners insurance cancelled altogether. Leaky roofs, old hot water heaters, dripping pipes and poor water seals are just some of the items to watch out for. In 2012, 17.5% of the losses claimed were related to water damage and freezing pipes.
8. Weather preparations
Being ill-prepared for bad weather can also impact homeowners insurance rates. In some states such as Florida, a homeowner can have a qualified wind inspection that demonstrates the ability of the insured structure to withstand certain force winds, which can result in a discount.
9. Claim frequency
Insureds who make multiple claims may be viewed as a higher risk and charged accordingly. Damage from a burst pipe, a tree that lands on the roof, or a kitchen fire on the same property will raise a red flag and cause insurers to take a closer look.
10. Neighborhood crime
Living in a high crime area has been tied to an increase in certain types of claims, such as robbery, rates are be assessed accordingly. Approximately one in 190 insured homes have a property damage claim related to theft each year according to the I.I.I.
Based upon I.I.I. figures from 2011, rates for homeowners insurance are highest in Florida, Texas, Louisiana, Mississippi, and Oklahoma. Idaho, Oregon, Utah, Wisconsin and Washington have the lowest rates.
All content provided in this blog is for informational purposes only. Topics discussed on this blog relate to insurance products and issues in a general application, and are not an offer of insurance, a guarantee of coverage, or applicable to specific and individual circumstances. Contact LG Insurance Agency for questions and information specific to your insurance needs.
