No one enjoys paying their homeowners premiums. Most consumers think that the cost is not worth what they are receiving on their investment. They usually change their tune when the unexpected happens: they suffer a loss due to fire, burglary, flooding, or some other damage that is covered under their policy. It’s at that time that they pat themselves on the back for making such a sound investment.
However, everyone wants to lower the cost of their premium if they can. And there really are ways to do this. Your rates are based on what your insurance company estimates as the risk you represent. If they conclude that it is probable that you will be filing claims at a higher than average rate, you will pay more than if they have judged you to be a client who poses a lesser risk.
What Issues Affect the Cost of Your Seattle Home Insurance?
When calculating your premium rate, home insurers look at three criteria: the area in which you reside, how many and what type of claims you have filed previously, and your credit score. Since you do have control over some of these issues, you can work to lower the cost of your premium
The Area in Which You Reside
Every area in the country is experiencing a rise in the cost of insurance, but those who live in areas in which natural disasters such as earthquakes, wildfires, and hurricanes are common face even higher costs for their premiums. Those who live in areas that are known as high-crime are likely to face higher rates. Of course, there is nothing you can do about preventing natural disasters, but you can take measures to protect your home from damage and theft, and if you live near an emergency center such as a firehouse or a police station, your insurer is likely to quote you a lower rate on your policy.
How Many and What Types of Claims You File
Some people are afraid to file home insurance claims, thinking that this will result in them being “blackballed” by other insurers, or that they will face a significant rise in the rate of their premiums, problems with obtaining future insurance policies, or that they will lose their coverage altogether. Although there are risks to filing claims, the major factor that will affect your insurance situation is the TYPE of claims that you file, rather than number of claims you make. But do keep in mind that it is a bad idea to file multiple claims within a short span of time. We’ll explain more about that later in this article.
The Claim Loss Underwriting Exchange (CLUE), which is an insurance service run by a company called ChoicePoint, has indentified the three major causes for claims that are most likely to raise your insurance rates. Those three are:
- Injuries sustained from dog bites
- Damage resulting from water
- Injuries sustained from slips and falls
Your Dog
Injuries sustained from dog bites are the number one reason for home insurance claims. You insurer is likely to have a listing of dog breeds that are most prone to aggression and violence against humans, a list that has been compiled by statisticians at the Center for Disease Control and Prevention. If you own one of the breeds that are on the list, you may have trouble getting coverage at all. Even one attack will probably cause your rates to go up. However, there are things you can do to keep the situation from getting worse. It may break your heart, but to keep your insurance from being cancelled or your premiums from going through the roof, you may have to put the dog down or give it away. Less drastic measures include the intervention of a dog trainer or an animal psychologist. In some cases, your insurer may put you on a probationary period with the animal for a specific period of time, and once that time passes without an incident of attack, your rates will remain stable.
Damage from Water
If you file a claim for water damage, you are going to attract a lot of negative attention from your insurer. A big problem resulting from water damage is the growth of mold, which is very difficult to control and eliminate. There is a bit of controversy going on right now because the Claim Loss Underwriting Exchange generates reports on water damage and the affect that is has on the sale of real estate. It’s not the reports that are controversial themselves; it’s that prospective homebuyers do not have access to them, while home insurance companies do. So this information about your home, which you are not privy to, could be a deciding factor on whether of not a carrier will choose to issue insurance at all.
Water damage that has resulted from faulty plumbing is another factor that can cause your premiums to rise, especially if the plumbing is faulty because you have neglected to adequately maintain it. If you know you have been negligent in caring for your plumbing, it’s probably best that you do not file a claim. Fix the problem yourself and maintain the system after the repair, thereby avoiding future claims. If the damage sustained was not major, you will probably end up saving money because the cost of your premium will not go up.
Claims Resulting From Slip-and-Fall Injuries
According to the National Safety Council, slip-and-fall injuries are the number one cause of visits to the emergency room. Slip-and-fall injury is a term used by home insurance companies that refers to injuries sustained when someone encounters a hazard on your property that cause them to slip and fall. If a third party incurs a slip-and-fall injury on your property and then files a claim against you with their insurance company, your own insurance rates may increase.
How Should You Decide When to File a Claim?
There is no set answer to this question. Filing your first claim is unlikely to trigger an increase in your premium, but if you file a second or third claim, especially within a short span of time (generally within three years) you will probably face an increase in your rates. However, each home insurer is different, and certain factors are taken into consideration, such as the length of time you have been with the company and the type of claims that you have filed.
Consider your options carefully when deciding whether or not to file a claim. Generally, it’s best not to file a claim for small amounts of damage, because this is likely to raise your premium, and the cost of repair would probably be less than the cost of the rise in your rates. Also, steer clear of filing claims for damage that has resulted from lack-of-maintenance issues. This will also raise your rates. In short, keep your home in good repair, and try to fix minor damages yourself. Take assessment of the state of the infrastructure of your home and replace or repair anything that is not in tip-top shape. The money you spend on measures that will protect you from damage is money well spent. It will most likely save you money in the long run by reducing the cost of your home insurance
Your Credit Score
It’s obvious that having a high credit rating is a good thing. It will go a long way towards saving you money on your premiums, especially if you are a new homebuyer who is shopping for your first policy. Seattle home insurance carriers view your high credit rating as an indication that you are a responsible and stable person. This positive impression that you make on your insurer will probably qualify you for a discount on your homeowner’s policy.
Everyone needs home insurance so that they can be assured that they will be covered in the event of serious loss. “Serious loss” is the key term here. Make sure you know the difference between minor damage and major loss, and make your decisions on when to file a claim accordingly. Take preventive measures to increase the safety and condition of your home, keep you credit rating high, and know that you have done everything you can to both save yourself trouble down the road and money in the present.
Let SeattleHomeInsuranceQuotes.org provide you with no-cost Seattle home insurance quotes today. See how simple and quick shopping for insurance can be.
