Factors Affecting Home Insurance Premiums – Since the home industry is dealing with the increase in loss costs, here are some of the factors that can affect premiums going forward.
There are many ways you can address questions about any premium increase and offer options that can address budget and coverage needs.
Factors Affecting Home Insurance Premiums
• Provide background information on national factors and trends. It explains the many unforeseen factors driving increased risks and costs, including: increased construction material shortages and prices, and extreme weather.
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• Offer to do a coverage audit. Quantum Home 2.0® is designed to provide more personalized protection, allowing you to increase or decrease the coverage of the basic policy, enhance it with optional packages and complete with special options to further tailor your client’s coverage.
• For customers who have purchased a Declining Deductible® or Loss Forgiveness, remember the benefits. Customers with a Declining Deductible receive a $100 credit each year that will be applied to the deductible in the event of a loss. Loss forgiveness helps clients avoid a tax increase related to a loss every five years.
• Consider adding the Roofing Systems Payment Schedule for Windstorm or Major losses. This savings endorsement reduces coverage by paying a specified percentage of the cost to repair or replace a roof when damage is caused by wind or hail. The percentage is based on the age and type of roof, so be sure to keep the age of the roof up to date according to their policy.
• Offers total multi-policy refund account solutions. Travelers offers attractive and highly competitive discounts for customers who bundle different types of coverage.
Factors That Affect Home Insurance Premiums
• Consider any upgrades that may qualify for refunds. Installing safety features such as smoke detectors, fire alarms, water sensors, indoor sprinklers, home security systems or smart home technology could offer additional savings.
• Ask if they will consider a higher deductible at lower premiums. Remember that switching to a higher deductible is a way to quickly lower your premium.
With Travelers and Trust Hall, you can tailor coverage to meet your customers’ needs and budgets with flexible base policy limits and coverage levels, convenient packages that combine popular endorsements and a range of special options and discounts . And your customers are supported by:
• Knowledgeable Claims Professionals who have the technical expertise to assist clients with a claim and strategically resolve any claim challenge. We also have trained disaster response experts ready to be deployed within 24 hours in the event of a disaster.
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• Innovative digital marketing tools and resources that help your agency connect with consumers on social media, increase your online presence and drive leads to your agency. Agents using these tools can generate 10% more leads, while increasing cross-selling and retention. These top complementary marketing resources include: While Home Insurance is not a legal requirement in Canada, it is often a prerequisite for mortgage approval by most banks and mortgage lenders. And even if your home is fully paid for, it’s still a smart investment to protect your personal property against the unexpected. But have you ever wondered how exactly your Home Insurance premium is calculated?
From the location of your home to your personal history, there are many elements that go into each insurer’s unique risk assessment method. And whether you’re a first-time home buyer or a long-time home owner, knowing the mechanics of it all can help you make informed decisions about your Home Insurance and manage the cost of your coverage. Read on for a closer look at the factors that affect your Home Insurance premiums!
The physical location of your home is one of the biggest factors in determining how much your Home Insurance will cost. Insurance companies track the type, frequency and cost of past insurance in your specific zip code – and use your area’s claims history to predict the likelihood of future claims.
But the more risk an insurer assumes, the more they pay you for insurance. This means if you live in a high crime area, or in an area prone to natural disasters such as floods or earthquakes, then your Home Insurance rate will increase accordingly. So if you are looking to buy a new home, you may want to keep location in mind.
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Your home insurance premium will be calculated based on the replacement cost of your home, not market value. What is the difference? The replacement cost of your home refers to the total amount it would cost to rebuild your home if it were destroyed. This includes the cost of materials and labor required to restore the home to its original condition, accounting for inflation. In contrast, the market value of your home takes into account other factors, such as your location and the local housing market.
The higher the replacement cost of your home, the more expensive it is to insure. And if you plan on making renovations or improvements to your home, such as a new deck, a finished basement, or even an increase in square footage, be sure to let your insurer know! The replacement cost of your home could increase as a result, which means you will need to increase your Home Insurance to maintain full protection.
As your home ages, it will deteriorate and become more vulnerable to structural problems, faulty pipes, damaged roofs, electrical faults and many other problems. Some of these hazards could increase the likelihood of your home sustaining damage, whether from water, fire, or extreme weather events. Because of this additional potential risk, Home Insurance premiums generally tend to increase as homes age.
Do not forget: any damage that occurs as a result of poor maintenance will not be covered by your Home Insurance, so you will have to be diligent to keep your home in top shape. Fix any problems as they arise, and make sure the plumbing and electrical systems have been updated to today’s standards, especially if you live in an older home.
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It usually costs more to insure homes with oil heating than homes with gas or electric heating. For what? Oil tank leaks can be extremely expensive and damaging to your property, especially if proper maintenance precautions have not been taken.
Having a wood stove will also increase your Home Insurance as it comes with an increased risk of fire. Also, most insurance companies require that your wood stove be certified within the last 5 years.
Believe it or not, the distance from your home to the nearest fire department or fire station is an important factor that insurance companies use to determine the cost of your home insurance. This is because the closer to the fire services, the sooner a potential fire can be extinguished.
Homes that are lucky enough to be within 300 feet of a fire hydrant will see the lowest premiums, while homes that are more than 13 miles from a fire station will see the highest premiums. While this may not be a big problem in most cities, it could present a problem for those who live in more remote rural areas.
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Having a pool or hot tub may seem like all fun and games, but from an insurance standpoint, it also increases the risks of someone getting hurt—or even drowning—on your property. Whether it is a friend, family member or stranger, you may be responsible for their injuries, resulting in considerable legal costs. To be on the safe side, pool owners should look for adequate fencing and signage to deter criminals and consider increased liability for any claims.
Similar to Auto Insurance, your insurance history will affect how much you end up paying for Home Insurance. If you have had continuous Home Insurance coverage without any claims for a specific period of time, you may be rewarded with a discount on your premium.
On the other hand, if you have had a claim in the past, even if it is from a previous residential address, you may see an increase in your premium. But the good news is: if you lack claims ahead, then you can ask for a discount again at a certain point of the line. To keep your record clean, it can sometimes make more sense to pay out of pocket for smaller damages instead of filing a claim.
Your credit score is generally used to show lenders that you can be trusted to pay your debts, and also, some insurance companies see it as a way to assess your overall level of risk. Those with better credit scores may be eligible for better rates and even discounts on Home Insurance.
How Credit Scores Can Affect Home Insurance Premiums
Newfoundland and Labrador is the only province that prohibits the use of credit history as a factor in determining Home Insurance premiums. In the rest of Canada, insurers are allowed to look at your credit score to help calculate your Home Insurance premium, but that doesn’t mean that everyone does. Before making a final decision, it is important to shop around and compare your options. And if you need guidance, contact your broker!
While running a home business won’t directly affect your premium, it’s worth noting that your Home Insurance will exclude it completely.
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