6 Factors that Negatively Impact Your Property Insurance


Homeowners must have property insurance to protect their homes from damage, theft, or liability. Lenders will likely not even approve you for a mortgage if you don’t take out a policy. Homeowner’s insurance might seem like another pesky bill to have to pay, but many shoppers aren’t fully aware of certain factors that can cause these premiums to go up.

The following are some of the biggest factors that come into play to cause insurance premiums to rise.

1. Pets

Your furry friend may be bringing you and your family oodles of joy and company, but did you know certain pets can increase your homeowner’s insurance premiums? Any animals on the premises that are considered to be likely to cause some sort of harm to others or damage to the property can result in an uptick your insurance payments.

Dogs have long been liabilities, and are among the biggest threats, depending on the type. Such breeds include pitbulls, Rottweilers, and Huskys. In fact, about one-third of all homeowner’s insurance claims are due to dog bites. However, some insurance providers are open to offering discounts on policies if you send your dog to obedience school, or take the dog to a Canine Good Certificate program.

2. Location

Properties that are situated near coastlines or in hurricane-prone areas generally come with more expensive insurance premiums compared to those that are further away from such characteristics. The reasons are obvious: the chances of damage from flooding or windstorms are a lot higher for these homes in these areas. Not only are the premiums more expensive, homeowners with properties located in these types of areas may also have to take out additional policies for flooding or windstorm insurance.

3. Old Age

Even if your aging home was built using solid craftsmanship and materials, it’s getting old, and along with age comes a lot of wear and tear. Not only that, the building codes from back when your home was constructed likely don’t match up with today’s more stringent codes. As a result, insurance providers probably don’t see your home as sturdy as a brand new house in the neighborhood. In this case, you can expect your insurance premiums to be a little more expensive.

In addition, insurance providers will estimate the true cost of rebuilding a home if it is ever damaged and needs to be reconstructed. If your home is considered difficult to replace or repair, or is estimated to be more expensive to replace, insurance rates can be higher. Things such as plaster walls, intricate crown moldings, stained-glass windows, and other traits that are not likely seen in modern homes are usually more expensive to replace. 

4. Pools

A swimming pool in your backyard may increase the value of your home (depending on the neighborhood), but it can also cause your insurance premiums to spike. Characteristics like these warrant additional liability coverage in case someone gets hurt or even drowns as a result of this feature. If you have a variety of special traits, including a pool, hot tub, or trampoline, you might want to consider getting an ‘umbrella policy’ that will offer you protection if anyone is hurt as result of any one of these features and decides to sue.

5. Frequency of Claims

The more insurance claims you’ve made in the past, the more likely you’ll be to take out more additional claims in the future. That’s precisely how insurance companies look at their clients. Even if the claims you’ve made in the past had to do with previous homes you’ve lived in, they still count. The more claims you’ve got on the books, the higher you can expect your insurance premiums to be.

6. Neighborhood Crime Rates

The more prone your home is to damage, theft, or other situation, the more money insurance providers will likely collect from you. If your home is located in an area with a high crime rate, it’s considered very vulnerable to crime. Even if you or your home have never been the victims of a crime, you’ll still have to pay up as a result of other happenings in your neighborhood. The reason for this is because insurance providers decide on their rates based on collective risk; if the neighborhood you live in is considered high risk for crime, then more claims have likely been filed by others in the area, which will affect your rates.

The Bottom Line

Do yourself a favor and become educated on homeowner’s insurance, and the factors that can drive your rates up, as well as those that can bring them down. Insurance companies use plenty of factors to establish your home insurance rates. Make sure you shop around and get quotes from a few insurance companies so that you’re not paying any more than you need to.