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What makes homeowners insurance rates increase?

July 27, 2015

There are many factors that come into play regarding home insurance costs. And just because you move into a home and select a policy that you feel is right for you and your family doesn't mean the rate is going to stay the same. Over time, you are bound to make renovations or experience damages that will affect the amount you are required to pay per month.

Some renovations might add to your insurance costs.

When choosing a policy, it is important to not only select coverage and a price that applies to you, but to understand the factors that have a role in changing that price.

Installing a swimming pool

Having a pool can be enjoyable and relaxing, but it is wise not to assume that it will be covered under your existing policy. Putting a pool in your yard brings additional risk that wasn't there before. These risks aren't only limited to swimmers though. In fact, swimming pools can cause damage to the home and the backyard as well, whether it is due to leaking or some other accident. Because of this, it is highly likely that insurance companies are going to ask you to take out additional coverage.

"It is important to know what raises insurance rates.”

Renovating certain parts of the home

Not all renovations will increase the value of a home or lower insurance rates. In fact, many will raise your insurance rates. For example, if you put in a wood burning stove, or perhaps a new balcony, then you are introducing new risks to the home. While the balcony, either inside or outside, might be something you have always wanted, and adds value to the home because of the style, it is also dangerous and can raise a flag with your insurance provider.

Filing too many claims

When something goes wrong with your home, you should absolutely file a claim. Filing a claim will not raise your rates. However, when you file too many claims in a short period of time the insurance company is going to start asking questions. This is most common when an accident, such as a natural disaster, strikes and people file their damage claims as they uncover it, as opposed to all at once. It might not be on purpose, as they might realize there is more damage than originally thought, but this is why it is so important to make sure your claim is accurate and complete before filing.

Working from home

It is not uncommon for people to work from home these days. Technology has made it so that you can do just about anything from the comfort of your home. However, working from your home, especially if you are seeing clients, can add risk. Since you are spending more time there, and certainly have additional equipment, there is additional liability affiliated with the situation.

Know the reasons your home insurance rates could increase so you aren't caught off guard after putting in a swimming pool or building a new home office.