How to Win at Insurance Rate Roulette

For current homeowners as well as those looking to buy in Rosemary Hills or elsewhere, the right kind of home insurance is critical. A recent article on the MSN Real Estate website offers some things to consider when purchasing home insurance. In all cases, it’s important to talk with your insurance agent for more details.

1.   Mother Nature – If your home is or will be located where there can be hurricanes, mudslides, wildfires, or other natural disasters, you will likely pay more for insurance. You’ll be forced to use a small, high-risk insurer who could charge you three times more than average.

2.   Check Above and Below – A roof that hasn’t been updated in 25 years might also mean more for coverage. On the flip side, a new roof constructed of impact-resistant material could score you a discount of up to 20 percent. Just like the roof, outdated plumbing can cost you while newer systems can mean savings.

3.   Electrical Systems – While you don’t need a brand new electrical system for a good insurance rating, it still must have been updated during the past 25 years so it meets current codes, i.e. circuit breakers versus fuses.

4.   Location of Fire Department and Hydrants – If you’ll be living over five miles from a fire station and/or hydrants, expect to pay from 20 to 240 percent more depending on the distance. There are a few insurers who will instead calculate rates by how many fire loss claims have been submitted for a neighborhood, so ask your agent.

5.   The Neighborhood – Even if you’re buying a brand new Rosemary Hills house, you’ll pay more if your neighbors have recently filed claims for theft or other issues. Talk to your agent for details about the home’s location.

6.    Age of the Home – New homes have new utilities which can lead to hefty rate discounts, sometimes up to 30 percent. Be aware, however, that your discounts will decrease by 1 or 2 percent per year as your home ages.

7.   Home Maintenance – A well-maintained home will obviously have fewer issues and so cost less to insure. Early in the buying process, ask the current owners for a comprehensive loss underwriting exchange which is a history of the home’s insurance claims.  A home with a bad history could mean little or no insurance coverage.

8.   Home Security – Systems that automatically call the security company can get you a 5 to 10 percent discount, as can living in a gated community. However, lack of visibility to neighbors actually costs more. For insurers, visibility reduces risk.

9.   Swimming Pool – If it’s empty, you’ll have to cover or fill it and ensure that it is surrounded by a good fence with a locking gate. Otherwise, no coverage.

Because the insurance industry has changed so much in recent years, there’s really no way to guess at what your rates might be without asking an agent. But knowing these factors could help you focus on what can cost you versus save you money on your current or new home.

Contact me, Mynor Herrera, today for expert help buying or selling in the DC, MD, & VA areas! I also specialize in Bethesda and Chevy Chase, as well as the sub-divisions of Rosemary Hills, Rock Creek Forest, East Bethesda & Whitehall Condominium.