An unexpected home insurance premium increase can be like a hammer blow to the thumb for policyholders: painful. Get help dodging the blow by learning about (and, when possible, avoiding) these 5 common factors that can drive up your premium.
1. attractive nuisances
Attractive nuisances are the fun but dangerous things in your home that increase your liability and others' — especially children's — injury risk. Dogs are the most common example — their bites account for roughly one-third of all home insurance liability claims.
Swimming pools are another usual suspect for rate spikes. They're a major danger to young kids, and you can even be liable for harm done to people who use your pool without your permission.
With the risk that comes with household additions like these, it's no wonder your insurer might look for a little more protection.
Here are some other attractive nuisances that could bring up your rates:
- Tree houses
- Zip lines
2. risky structural or design elements of your home
Unfortunately, not all perils that increase homeowners insurance rates are under your control. Some might already be in place when you move in.
Do you have a wood-burning fireplace or stove? These bad boys account for 36 percent of rural, residential home fires each year, according to the U.S. Fire Administration. What about a balcony or winding staircase? If they increase the likelihood of falls in the home, they're serious threats — 20 to 30 percent of tumbles lead to moderate or severe injuries, say the Centers for Disease Control and Prevention.
Shoddy plumbing, appliances, exteriors, or wiring are just a few other home elements that might give your insurer pause. If you're moving into a house that has pipes, roofing materials, wiring, or appliances over 25 years old, it's probably time to replace or update them.
3. a home business
Just think about all the stuff you need to run a home business: computers, scanners, printers, desk chairs, phones, filing cabinets, stress balls…the list can seem never-ending. That's a lot of extra items at risk in a burglary or fire and a big potential reimbursement for your insurer. Not to mention the increased personal liability from having customers or clients visit.
A home business could possibly require separate insurance to provide the best coverages. If your home business proves too great a threat for loss, consider looking into designated business coverage instead of home insurance.
4. luxury items
Most run-of-the-mill watches, earrings, clothing, and artwork are covered under your standard contents insurance and won't affect your premium much. But the high-priced items in your collection, like that engagement ring, fancy auction painting, or emerald-encrusted tiara (you've got one, right?) could make you a serious target for theft and greatly increase the amount of replacement coverage you need.
Certain pieces, depending on their value, may require separate insurance riders. Riders are beneficial when covering big-ticket items that are worth more than your coverage limits.
5. your neighborhood
Frustrating as it can be, sometimes we're at the mercy of our surroundings. If your neighborhood sees a spike in burglary or fire claims, for example, you could see a premium increase even if you haven't had an incident.
Part of the reasoning here is that mishaps in the area might reflect greater risk for you, your home, and your stuff. In other words, a rise in the number of fires on your block, or a string of burglaries in your neighborhood might suggest that the surrounding area is not especially secure.
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Here's our primer on the ounce of prevention (to save you the pound of cure).
How is my premium decided?
Dollar for dollar, few coverages give you more protection for your premium than homeowners insurance.
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