Five Risks That Affect Your Home Insurance Premiums

Sherri Ramos

Buying a home is an expensive endeavor, not just because of loans and interest fees, but also because of all the hidden costs. One of these unexpected costs might be your home insurance. You may be shocked by the cost of homeowners insurance, so take a look at these 5 common risks that can increase your home insurance premiums.

Type of Dog

If you own what is considered to be a "dangerous" dog breed, this might affect your premiums. In order to avoid this you'll have to convince your insurance rep that your dog isn't vicious. In other cases you might just have to sign a liability waiver for dog bites.

Age of Your Home

When thinking about purchasing an older home you should consider that it may be more expensive to insure because repairs are often more costly and more frequent. On the upside, if you're living in an older home now, updates, like a new roof, may qualify you for lower premiums.

Proximity to Water

If your home is located near any body of water it could mean higher premiums because of the risk of water damage. This is especially true if you live near the coastline. In this case you may actually have to buy separate insurance for hurricanes and windstorms. If you're located near any body of water, you are technically at risk for flooding. Insurance for floods is not covered under regular home insurance, so it is recommended that you purchase it separately.

Swimming Pool

While having a pool or hot tub installed may increase the resale value of your home, it will also increase your home insurance premiums. While we see a swimming pool as a great amenity, insurers see it as a risk and will require you to increase your liability to up to $500,000 a year. This can result in about $50-$75 added to your home insurance bill every year.

Claims History

If you have a history of filing insurance claims, insurance companies will take this as an indication that you will file again in the future. This means they will likely increase your rates. Even the claims filed on your new house by the previous owners can have an impact on the rates of your premiums. Married people are seen by insurers as filing fewer claims and being less prone to risky behavior, so insurance rates are usually lower for them.