Beware: 5 Things That Jack Up Your Home Insurance Premium
After you’ve landed your dream home, you’ll now have to protect it – and everything in it – through home insurance. The price for premiums isn’t going to be the same for every home owner, nor will it come cheap.
Your insurance premiums will determine how much you pay every month – and how much you have to pay will depend on a few variables.
Be wary of these 5 variables that will jack up the price of your premiums so you can be vigilant about keeping your costs down without sacrificing coverage.
1. Living in a Shady Neighborhood
Everyone knows that location has a huge impact on the values of homes, it also has a big effect on the amount you pay on insurance premiums. If your particular neighborhood has a high incidence of break-ins, fire claims, or even car theft on driveways, for instance, you could be faced with a premium hike even if your particular home has never been a target.
The reason for this is that incidences in the area could reflect a higher risk for your home, your belongings, and even you and your family. The higher the number of fires or burglaries in your community, the higher the odds of more expensive insurance premiums.
2. Operating a Home Business
One of the first questions you’ll be asked when you’re inquiring about home insurance quotes is whether or not you’ll be running a business out of your home. Why would the insurance agent ask such a question? Because added risk comes with operating a business. Consider all the additional things you’ll need to carry out a business venture from your home: computers, printers, office desks, phones, filing cabinets, and so forth.
Consider other big ticket items, depending on the type of business you’re running, such as ovens (for home-based cake businesses), sewing machines, hairstylist chairs, etc. That’s a lot of items that are at risk should a break-in or fire occur, sparking a huge reimbursement for your insurance company. Not only that, but consider the increased personal liability from having clients visit your home for business purposes.
3. Having Super Expensive Items in the Home
Standard insurance policies cover pricey items like jewelry, watches, wedding rings, and so forth. But higher-ticket items like a rare auction art piece, 5-carat diamond engagement ring, or a mink coat will most certainly hike your premium, since pieces like these will be a serious target for theft. And the more expensive the item is, the more likely it will require its own separate insurance rider, which means more money out-of-pocket for you.
4. Having Questionable Design Elements or Structural Issues
Certain elements and structural issues of your home will increase the insurance premiums you’ll have to pay. Wood-burning fireplace ovens, for instance, can cause your premiums to go up, considering the fact that they are responsible for many residential home fires. Even having a balcony or a winding staircase can cause your insurance premiums go up, as they are considered threats for major falls.
If your home has old plumbing or electrical wiring, you can be sure that your rates will be higher compared to homes with more modern elements. If any of these things are more than 25 years old, you might want to consider updating them. Not only will your insurance premiums be reduced, you’ll also be making your home a safer one.
5. Having Fun Yet Potentially Dangerous Features
Before you install a swimming pool or put a trampoline in your backyard, consider the fact that things like these could have an effect on your insurance premiums. That’s because these items – while fun – are also potentially dangerous and can increase your liability. Even having a dog in the house could jack up your premiums because of their potential to bite anyone who comes into the home.
With the risk that comes with additions such as these, it’s not so surprising that your insurance company might look for added protection in the form of an increased premium.
You can’t avoid paying home insurance – it’s a must. But if you’re willing to make some changes and forego certain attractive nuisances, you can effectively shave a good chunk off your premiums. At the end of the day, make sure you’re fully aware of how your home and everything in it will affect your premiums so you aren’t left with any unpleasant surprises when your bill comes in from your insurance provider.
