Clovered's COVID-19 Response
  • Insurance 101
  • /
  • 9 Common Home Insurance Factors That Lead to Premium Increases

9 Common Home Insurance Factors That Lead to Premium Increases

By Teri Dormer

article views 710
article share count 6
article header image

Being a homeowner is great. Unlike the years you spend renting, owning your own home gives you a level of independence and freedom you’ll simply never find in an apartment or rental space.

Of course, when you own the home, you own everything else that comes with it, including the occasional insurance premium increase.

When it feels like nothing major has changed year over year, but your homeowners insurance rate still goes up, you might be wondering what’s impacted the change.

Here are nine of the most common reasons why your homeowners coverage may have gotten more expensive.

9 Factors Impacting Home Insurance Prices

As with any other form of insurance coverage, there are a number of factors that play into your rate. The same is basically true each year as your insurance provider renews your policy and determines if a rate increase is in order. 

Considering the average homeowner spends over $1,000 a year on their homeowners coverage, avoiding one of these unnecessary rate hikes could translate into massive savings. 
Get a Quote

1. Your Deductible 

If you preemptively opt to adjust the rate of your deductible, you may find an automatic change in your home insurance rates. The lower the deductible, the higher your premium will become. 

The role your deductible plays in the overall price of your homeowners premium also extends to any environmental disaster coverage specific to your area.

If you live near the coast or an area where wildfires are more common, the specific coverage you’re enrolled in for those concerns will have their own deductible rates to consider. 

2. Your Pets

Pets are like family. Just like a teenage driver who’s already gotten a ticket and is classified as a “high-risk” driver, certain types of pets will have a negative impact on your premium prices

Depending on the breed of animal you bring home, or their history if they’ve ever been involved in a bite or attack, you may find your home insurance prices on the rise.

One in three homeowners liability claims are linked to dog bites, so don’t be surprised if your rates go up if you ever have to deal with one. 

3. Your Recreational Activities 

Decided to install a new pool or a trampoline this summer? Sure, that equates to lots of extra fun outside, but it could end up costing you more than routine maintenance moving forward. 

Your homeowners insurance rate can be negatively impacted by the addition of an expensive or potentially dangerous recreational furniture. As a precaution, consider installing a fence or net around your pool or hot tub to help avoid any accidental injuries.

4. The Age and Condition of Your Roof 

They don’t call it having a “roof over your head” for nothing, and the age and condition of your roof plays a major role in your homeowners coverage rates. 

The older your roof gets, the more of a liability it becomes. When it gets to a certain age, your insurance provider may preemptively increase your rates to account for any potential damage to it in the future. 

On the other hand, if you decide to repair or replace your roof, let your homeowners insurance company know. You may end up saving on your premium costs, depending on the materials used for your new roof

5. Specific Types of Appliances 

If you’re making changes in the kitchen, you may want to reconsider the allure of a wood-burning stove. Sure, the ambiance is great, but is it worth the extra costs you’ll end up paying every year it’s installed in your home?

While you may be able to avoid a rate hike by providing your insurer with proof the stove was properly installed by a professional, that may not be enough to avoid a change in your policy price.

6. Running a Home-Based Business 

Being your own boss is the dream, but it may come with a few more added stresses than you were expecting. 

If you start to run a business from your home, your standard homeowners coverage may not be enough.

Depending on the kind of equipment you’re using or the inventory you’re keeping in the house, your insurance provider may increase your rates as a way of accommodating your new business needs.

7. Your Home Security Services

Not all changes in your homeowners insurance rates have to be bad. If you decide to install a new home security system, let your insurance provider know as quickly as possible.

Not only will the alarm system give you added peace of mind, but it could save you major cash on your insurance policy.

8. Home Remodeling

Making major improvements in your kitchen or bathroom is already expensive enough, but the bills may keep rolling in long after the contractors have left the building. 

Your new finishes and appliances cost money, and replacing them would cost money too. If you do any major overhaul to your home’s condition, it could cost you more in your homeowners coverage over time. 

9. Your Insurance History

Like it or not, if you have a history of filing claims with your homeowners insurance policy, you could find the coverage eventually becomes more expensive.
Get a Quote

Avoiding an Insurance Premium Increase 

Sometimes you can avoid having your insurance premium rates change on you, and sometimes you can’t. 

In the same way that your insurance company reevaluates your policy (and the price) every year, you should be proactively shopping your insurance around. You could be overpaying every month on coverage that’s significantly less expensive through a different provider.