Homeowner premiums are calculated using a variety of factors, some will lower your premium while others will increase it. We thought it might be fun to have a quick look at three factors that can absolutely push your premium up.
Pools and Trampolines
While a pool or trampoline (or both) are great ways to relax and are always fun for the kids, they can definitely impact your insurance premium, in a negative way. In the insurance world they are referred an “attractive nuisance.” This is simply anything that may attract a child but also poses a danger to any unsupervised children.
Swimming Pools: According to statistics from the USA Swimming Foundation, from Memorial Day through Labor Day in 2017 at least 163 children drown in swimming pools or spas. Due to the danger and severity of injuries that occur in swimming pools, insurance companies consider them a major risk and price their policies accordingly.
If you are considering putting in a pool or already have one, you should definitely check with your agent to make sure injuries caused by the pool are covered. In most standard homeowner policies you should be covered but there can be exclusions so it is always best to check.
In addition, pool owners should up their liability coverage dramatically. Experts recommend increasing your liability coverage to at least $300,000 and many recommend $500,000. This will help cover any medical bills or resulting lawsuits if someone is injured in your pool.
While it will vary depending on your location and other factors, expect your premium to go up anywhere from $50 to $150 a year if you put a pool in or purchase a home that already has a pool.
If you have considerable assets, adding an umbrella policy is a very affordable way to increase your liability protection. Umbrella policies are sold in $1 million increments and are a bargain with the average cost coming in at under $400 a year.
In most cases your insurer (or city ordinances) will require that you build a fence around your pool but we recommend the following safety features:
- Fencing around the perimeter of the pool
- Automatic safety cover
- A solid or mesh safety cover that is pulled over pool when not in use
- Post a warning sign
- Provide accessible safety equipment such as flotation rings
Trampolines: Trampolines can be even more dangerous than pools. According to the American Academy of Pediatrics there are roughly 100,000 trampoline related injuries every year.
Before putting a tramp in your backyard you should absolutely talk to your insurance agent. In some states, homeowners policies exclude trampolines from coverage. If this is the case you may need a rider to fully protect yourself and your assets.
When it comes to insurance and trampolines the advice is pretty much the same as it is for pools. Up your liability limits and consider an umbrella policy to fully protect yourself.
Here are a few safety tips to keep in mind when it comes to trampolines:
- Children under 5 years of age should not be permitted on a trampoline
- There should always be adult supervision and spotters around the trampoline
- Never allow more than one person to jump at a time
- Do not permit stunts, such as somersaults and flips
- Do not allow children to bounce off the side of the trampoline
- Place your trampoline in a fenced area to avoid liability issues
Insurance companies consider roofs one of the most important parts of your home. A roof protects the interior of your home and keeps all of your possessions safe and dry. Insurers have also found that if you have a damaged roof you are much more likely to file a claim.
All of this means that if your roof is old or damaged, you may end up paying much more for coverage and in some cases you may not be able to get coverage at all. There are some insurers who will refuse to write a new policy or renew an existing policy if your roof is over 20 years old.
Once a roof goes past a certain age, usually 15 to 20 years, insurers may require an inspection at renewal time. If your roof fails the inspection you will have to replace it before they will renew your policy.
An older roof will also result in a higher premium. The amount will vary depending on a variety of factors but in many cases you can expect to pay up to 25 percent more for an older roof.
Other considerations with a roof are replacement value vs. actual cash value. A replacement value policy will pay for a new roof regardless of cost, minus your deductible. Actual cash value policies take deprecation in to account when determining the value of your roof.
While if varies by insurer, a common figure for deprecation is $1,000 a year so if your roof is 20 years old, your insurer is subtracting $20,000 from your claim check which means you will be covering most of the cost of your new roof.
Many insurers will only write actual cash value policies once a roof goes past a certain age.
Here are a few tips to keep your roof in good condition:
- Always keep a set of current photos of your roof on file so you have a before and after set if damage does occur
- Replace any worn or broken shingles or tiles. This will help prevent more serious damage
- Cut back trees that overhang your roof and remove any dead trees that could fall onto your roof
Proximity to a Fire Department
How close your home is to a fire department will impact your premium. The quicker firefighters get to your home, the better chance there is of the house not being a total loss, which is why this factor is so important to insurers.
If there is a full-time professionally staffed fire station just down the road you will enjoy a lower premium than if you live in the country, 15 miles from the volunteer fire station.
Insurers consider a number of factors when setting a premium and your proximity to a fire station is just one, it is hard to determine how big of an impact this factor has on your specific premium. In general, urban and suburban homes score better on this factor than rural properties.
The Insurance Services Office (ISO), which is a New York based independent industry advisory organization sets ratings on communities across the nation and rates them on their fire fighting ability. Insurers use these ratings when setting premiums.
The ratings range from 1, which is the best protection class up to 10, which basically means there is no protection at all. The better your rating, the lower your premium. Unfortunately, there is little you can do if you live in a poorly rated area except wait for the county or city to put a fire station nearby.
While these are not the only factors that can impact your premium adversely, they are some of the major ones. If your homeowner rates have gone up recently or you are thinking about putting in a pool or trampoline give us a call and we can help you find an affordable policy.