Homeowners insurance costs can go up if you take these steps

The average cost of homeowners insurance is $2,304 per year. However, many factors affect the cost of covering any home, so some property owners pay less and others pay much more.

Costs are also not set in stone for policy. In many cases, homeowners insurance premiums can increase even after coverage is purchased. There are a few specific moves that property owners can take that can result in a significant increase in premiums.

1. Let the home crumble

Homeowners insurance companies want to make sure the property they cover is in good condition and as protected from the elements as possible. As a result, homeowners who fail to maintain their property can end up paying much higher premiums than their current bill.

Let’s say, for example, that a homeowner chooses not to repair their roof, even as it ages and begins to leak. Their standard insurer may turn them away, forcing them to purchase coverage from a high-risk insurer that may charge much more for less coverage.

Something similar happened to me too. Many years ago I bought a home that needed some remodeling and the insurer judged the roof to be in bad shape even though it wasn’t leaking. The company wanted us to replace the roof, which we didn’t, and as a result raised our premiums by 10% because they said our house was riskier to cover.

2. Filing a claim under the policy

Homeowners who actually make a claim on their insurance policy may also face higher premiums. Prices can increase by around 9% to 20% per claim, depending on the insurer and the specifics of the claim. This is because insurers have found that people who make one claim are more likely to make others in the future.

Read more: Check out our picks for the best homeowner’s insurance companies

3. Adding a pool

The pool is also considered risky by the insurer because there is a greater chance of a liability claim if someone is injured. The insurer must also cover the pool under the cover of other structures, which means there is an additional type of loss to pay out.

Adding a pool can add about $50 to $75 to your annual home insurance policy premium. Homeowners should be sure to consider these ongoing additional costs before deciding that installing a pool is the right choice.

4. Adding an expensive new addition

Property owners need to make sure their policy limits are high enough to cover the property’s replacement value, even as it changes over time. Otherwise, there may not be enough money to refund.

Building an addition to a home increases the cost of rebuilding it, so purchasing more home insurance coverage may be necessary. Getting higher coverage limits will usually increase insurance premiums. The exact premium increase will depend on how much coverage limits need to be increased.

5. Getting a dog

Because homeowners insurers provide liability coverage and may have to pay out when the policyholder is sued, anything that increases the chance of a lawsuit will cause the insurer to raise rates. And having a dog can increase that chance, since dogs can bite.

Certain breeds make insurers particularly nervous, and getting one of these can lead to much higher insurance premiums or even reduced coverage. These typically include breeds such as pit bulls, German shepherds, and Rottweilers. Anyone bringing one of these animals home should check with their owners’ insurer to see what the added costs will be.

In some cases, paying a little more for homeowners insurance makes sense if it allows for lifestyle improvements (like building a pool for someone who likes to swim, or adding a dog to your family). But it is important to know this in advance so that higher insurance premiums do not lead to financial problems.

Our picks for the best homeowners insurance companies

There are many homeowners insurance companies to choose from. We researched dozens of options and shortlisted our favorites here. Looking for a green building discount or easy package rules? Want an easy-to-use interface? Read our free expert review and get a quote today.

Leave a Comment

Your email address will not be published. Required fields are marked *