For policyholders, an unexpected premium or rate increase on your policy can be quite detrimental as it pertains to your monthly payment. Learn how you can avoid these premium hikes, and keep your rates as low as possible as a buyer. There are five unexpected costs a buyer should be aware of, as detailed below.
1. Fun Accessories
You know those “fun” things in your home, they are also the nuisances an insurance company considers extremely risky, equating to a costly risk. A dog, believe it or not, is one of the costliest nuisances. A swimming pool is another well known reason your rates jump on a policy premium. Not only are they dangerous for the kids, but also visitors who use your pool (with or without permission).
With these risks, you can see why rates spike up so high; in addition to these two listed above, other common nuisances include:
Tree houses, zip lines, trampolines, diving boards or slides. They are dangerous, risky, and if they are on your property, can result in a major price increase in your premium rates.
2. Structural/design elements which are risky
Of course not all perils which hike up those rates are under your control; this is one category you must consider as a buyer if you are shopping for a new home, and want to keep rates down. Some of these items might already be in the home when you move in. A stove or wood burning fireplace account for up to 36% of rural residential household fires annually. This is one of those risks insurance companies look at.
A widening staircase or balcony are also risky in terms of policy premium hikes. They are accountable for 20 to 30% of falls in homes annually, which can lead to major injuries. This is noted by the Center for Disease Control and Prevention. Your appliances, shoddy plumbing work, wiring and other structural issues, are also dangerous which can lead to higher premium rates for owners. If your appliances are 25 years or older, it might be time to consider an upgrade.
3. A business run out of your home
Scanners, printers, computers, electronics, desks and chairs, phones; these are only a few of the items you are going to need if you run a business out of your home. If a burglary or a fire were to occur, these are additional items which require protection; and, they aren’t cheap to cover. Additionally, if clients visit the home, personal liability policies should be in place to avoid lawsuits or liability in the event of injuries.
For the best coverage, many home businesses should have an additional policy or endorsement; a designated business policy might be the better route to go as opposed to homeowner coverage, if your business posses many risks.
4. Those luxury items
Sure, the watches, clothing, and cheaper items you own are covered by a basic homeowner insurance policy and will be reimbursed for in the event of loss. But how about that Picasso painting, that pricey engagement ring, or your collection of Gucci leather jackets? These and other luxury items are extremely costly, meaning an insurance company is going to hike up your premium if you would like to have the added protection of insuring these items in your home.
Your home could be a serious target for theft or burglaries, simply having these items in it; so of course your rates are going to go up because of that. In some instance, separate insurance riders are required for items of a certain value. Big ticket items will benefit from a rider policy coverage, as the full value of these items is accounted for and protected with your homeowners insurance rates.
5. Where you live (the neighborhood)
Location, location, location. Yes we want the best when it comes to buying a home. But, just as compelling as it is as times, where we live can also mean a peril in terms of the rates you are going to pay when it comes to your insurance premiums as a homeowner. If burglary claims have risen where you live in recent years, a rate increase might follow. This also goes for claims of fire, or other policy coverage protection. As an owner, simply because you live in those areas, you are going to pay the price for it, even if you never have to use your policy. This means even if you’ve never had an incident or filed a claim, the price of your premium can jump a great deal, just because of the area you live in.
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Those mishaps in the area, might pose a greater risk for you as an owner in that area. So this is one of the reasons which insurance companies give if you live in an area which is risky or has seen many claims in recent months and years. As an owner, you and your belongings are potentially at risk meaning you are going to pay a higher price to protect these items and your home.
This basically means if the number of house fires goes up where you live or on your block, or if several burglaries start popping up in the area you live in, your home is considered to be in a “risk area.” This means you are living in an area which is prone to threats, meaning you are living in an area which is not considered to be safe by the insurance provider you have your premium coverage with.
It is important to know what you are paying for, and what might cause those rates to increase as it pertains to your premiums on a homeowners policy. With Coastal Insurance, not only can you rely on the top agents to help you find the right level of coverage, but also to fully understand what is protected under your policy. Further, the agents you speak to are going to address your issues, concerns, and are always available to answer any questions you have, as they pertain to your policy, the rates, or additional coverage that you want to add to the existing policy that you already have in place with the insurer.
Questions? Call us at 631-782-3175
For more information and helpful video’s explaining everything from, how to save money on Homeowners Insurance to an easy explanation of Flood Insurance, be sure to visit the Coastal Insurance Video Library.
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