Unexpected Ways You Could Be Increasing Your Home Insurance Costs
Homeownership can have many potential challenges, such as weather damage, theft, and injuries. To avoid paying for any of these instances’ damages or legal fees out of pocket, many people purchase a home insurance plan to provide them coverage.
However, most people likely don’t want to pay an arm and a leg for their insurance. Many factors can affect the cost of coverage, leaving the policyholder to wonder why did my home insurance rates increase?
If you’ve noticed an increase in rates or are simply trying to avoid paying more for coverage, it’s essential to know what can potentially cause these price hikes. If you know the source, you can do your best to alter or avoid these instances to save on your coverage costs.
Home Improvements and Additions Mean More to Insure
If you’ve completed renovations or added extra square footage to your home, you’ve likely seen an increase in your insurance premiums. While this instance is somewhat unavoidable — unless you plan on avoiding improving your home — it is essential to understand why insurance companies charge more after these projects.
Your insurance company will look at the cost of replacement on your property, whether that is new updates or more space. Since these new items or areas will cost more to replace, your provider will adjust your rates accordingly — likely increasing them based on how extensive your improvements are.
For example, updating your kitchen is no small task, and your insurance company will likely increase your rates to compensate for the new and improved room. However, a kitchen remodel is less expensive or extensive than a 1,000-square-foot addition to your home.
Both improvements will likely cause your insurance rates to increase. But your provider will base the amount of your price increase on the extent of the work you completed.
Filing a Claim Might Increase Your Rates
While it may seem unfair, since the whole point of having home insurance is using it when it’s needed, filing a claim can often cause an increase in your premiums. Though it’s not always the case, it is a possible reason you may see higher rates.
Once you file a claim, your insurance provider may see you as a more high-risk customer. Because you’ve already used your policy once, they will increase your rates to compensate themselves in case you need to file another.
Some claims, such as water damage, dog attacks, and theft, are more likely to cause your rates to spike since there is a more probable chance they will occur again.
The excellent news with rate increases from filing a claim is that they are often temporary. While every provider may differ, many rate increases will fall off after about five years.
Adding a Furry Friend May Cause Higher Premiums
Many people enjoy having pets in their homes for companionship and unconditional love. However, bringing a new dog into your home can affect your insurance costs.
While many pets, such as cats, fish, and birds, are considered low-risk, dogs can tend to be considered high-risk. Some breeds have a more extensive history of aggression, leading your provider to raise coverage costs to compensate for the potential risk.
The most common breeds that raise insurance rates are German shepherds, pit bulls, Doberman pinscher, Siberian huskies, and Akitas. However, every insurance company is different, so you must ask your agent which breeds they consider high-risk.
Even if your dog is sweet and non-aggressive, these breeds tend to have a bad reputation based on previous insurance claims. If you want to keep your premiums lower, there are a few steps you can take with your furry friend.
Have Your Dog DNA Tested
If you’re uncertain about your dog’s breed, performing a DNA test can help prove they are not high-risk. If you send the results to your insurance company, they use the proof to lower your rates.
Take Your Furry Friend to Training Class
If your dog is considered a high-risk breed, you can always enroll them in training courses. Often, a certificate of obedience training looks good to your insurance company and can help lower your rates.
Fun Add-Ons Can Mean Higher Risks for Insurance Companies
Swimming pools and trampolines are among the most common add-ons people choose for their homes. While these items are a great way to increase the fun around your house, they can also increase your risks.
There is a much higher likelihood of injury when you have a trampoline or swimming pool. Your insurance company will most likely raise your premiums to compensate for the potential liability claims you may file.
If you have guests over to enjoy your new add-ons and they are injured on your property, you will technically be held responsible. You’ll need to file a claim through your insurance company, which can become costly depending on the extent of the injuries.
You can reduce your risk of injury with these items by taking a few precautions. Your insurance company may offer some reduced rates for taking the proper steps to reduce the risk of injury.
Protect Your Pool From Accidents
Two of the best ways to prevent accidents in your pool are installing a wall or fence around it and adding a safety cover. These precautions can significantly reduce the chances of someone accessing your swimming pool unsupervised.
Fences or walls can help keep children away from your pool, while safety covers prevent potential injuries. You can see this site if you are interested in adding quality fences for your home.
Avoid Potential Incidents on Your Trampoline
Adding a safety enclosure around your trampoline can help prevent falls and injuries. You can also install safety pads on the springs, hooks, and frame to help further prevent any accidents from occurring.
Explanations for Increased Home Insurance Rates
When owning a house, home insurance is essential to protect you and your belongings from damage, theft, and injury. However, you may not always expect your rates to increase.
There are many reasons your provider may increase your rates — from upgrades to adding a new family pet — that may never have crossed your mind. It’s essential to understand why your premiums could go up, so you can be prepared or avoid them if possible.