So you got insurance for the roof over your head, the engagement ring passed down through your family, and the trusty backyard golf cart.  You’re feeling safe with the comfort that if something bad happens, someone else will swoop in and rebuild your home.

But then one day you and the neighbor are comparing home insurance prices and yours is $300 more than his.  What gives?

Here’s the scoop.

While there are a variety of factors, here are the top five:

1.  Replacement Cost

Your Homeowner’s policy is structured around the replacement cost of your home.  This is not the market value, but rather that actually cost estimate for rebuilding your home in the case it is totally destroyed.  Insurance agents use valuation tools to figure the cost per square foot.

TAKE AWAY:  Don’t be too surprised if the Dwelling Coverage on your insurance policy is significantly different than what you could sell the house for.  It is based on replacement cost.

2.  Claims

A claim is the act of using your insurance. You suffer a loss, you file a claim. That’s why you bought the coverage, right?

When a tree falls through the roof or the stove starts a fire, it’s time for your insurance company to get involved and take care of you.  But a claim definitely does raise your insurance premiums for the next 3-5 years.  How much depends on the kind of claim and the cost of the claim.

TAKE AWAY: Don’t be scared to use your insurance, that’s why you bought it.  But make sure you are well advised about the consequences of a small claim.  Your agent should be able to help lay out the future costs of your decision.

3.  Credit Score

One thing that most folks don’t realize is that your credit has a significant affect on your insurance costs.  Why?  Well the bottom line is that insurance companies don’t know you and they need some way to understand your behavior patterns.  Credit is the most accessible solution.

TAKE AWAY:  Paying bills on time, creating a budget, and living within your means can have far reaching financial effects. You can get your credit scores here for free once every 12 months.

4.  Occupancy

Who actually occupies the home can make a significant difference in your price.  Here’s a short list of occupancy types from least expensive to most:

• Owner Occupied (Your Home)
• Tenant Occupied
• Vacation Rental
• Vacant

TAKE AWAY: How your property is occupied matters!  Make sure your insurance agent is aware of who is living in the house, and always keep them posted on changes.

 5.  Age of Household Systems

Old household systems (roof, heater, plumbing, and electrical) can affect your insurance costs but it can also be a deal breaker with good insurance companies.  Here are the top three things companies look at and what there thresholds typically are.

• Roof

Companies want your roof to be less than 15 years old.  They will often bend on this depending on the material and condition.

• Heater

Companies like to see less than 20 years, but again may bend with a proper inspection.

• Electrical

If you don’t have circuit breakers and updated wiring, you’ll see higher costs

TAKE AWAY:  Home renovations can be costly, but there are financial benefits.  In addition, they make you and your family safer.

So there you have it, the top five players in your property insurance premium.

Now it’s time to consider what is affecting your premium.  Get out your policy and consider the above factors.  Are there things you could address to lower your costs?  If you are wondering what effect each change will have, contact your agent and have him/her help you with the cost analysis.

If you only have an 800 number to call for advice, let’s fix that.  Give Shine a call today!

What about your Auto Insurance?  We’ve got you covered!  Just click the above link to uncover the secrets of your auto coverage.