Most insurance companies provide a copy of their rate filings to the Idaho Department of Insurance. Although rates are reviewed by the department, the department does not approve homeowners policy rates. However, the department does have the authority to disapprove rates that are found to be excessive, inadequate, or unfairly disciminatory.
What Impacts Homeowners Insurance Premiums?
The cost of homeowners insurance coverage depends on a variety of factors that tell insurance companies about your risk (the likelihood of a loss). The characteristics and the location of your home are factors that impact your insurance premium.
Your Home's Characteristics
The characteristics of your home are typically a significant factor in the cost of your insurance and affect the types and amounts of coverage you may need. The components of your home determine how much it would cost to rebuild your home if disaster strikes. The following are some of the characteristics that may be considered in the rating of your home insurance premium:
- type of construction
- finishes (hardwood, granite, etc.)
- type of roof
- age of house
- square footage
- number of stories
- other structures on the property (fence, shed, pool, garage, etc.)
Your Location
The location of your home can impact the likelihood you may file a claim, which typically impacts the amount you pay for your insurance. Areas with a greater exposure to natural disasters or with a high crime rate may affect your homeowner insurance rates.
Also, the distance your home is from a fire hydrant and the quality of your local fire department affects the response time to a fire, which typically is a factor considered in your insurance rate.
Your Deductibles
The amount the policyholder pays out of pocket towards a claim is called a deductible. Typically, a higher deductible amount will result in a lower premium.
Your Risk Management
Your premium may be impacted by steps you take to minimize the risk of damage to your home. For example, you may be able to receive a discount or a reduction in premium by installing a home security system, automatic sprinkler system, automatic water shut off system, or upgrading major systems like your air conditioner, heater, or plumbing.
Your Claims History
Insurance companies often look at claims history for a home and/or an insured. The amount of time that an insurance company will look back is determined by each insurance company. Also, some insurance companies might charge extra for certain types of claims that have been filed in the past.
Your Characteristics
When you apply for an insurance policy, the insurance company or insurance agent will typically ask for your age, marital status, if anyone else lives with you, and how long you have lived in your home. Insurance companies may provide discounts for seniors, certain occupations, and/or for new homeowners.
Your Personal Belongings
When deciding on the amount of coverage to purchase for your personal belongings, consider how much stuff you have and the value of your items.
Many policies have limitations on how much coverage is available for certain items, such as fine jewelry, antiques, artwork, etc. You may want to consider requesting additional coverage for those items, commonly referred to as “scheduled personal property.”
The types of items and the types of losses available for scheduled personal property can vary among insurance policies. Often, an additional premium will be charged to schedule valuable items.