What Makes Home Insurance Expensive?

Insurance carriers take hundreds of factors into consideration when calculating premiums. Here are the six things that make the biggest difference to your home insurance rate:

  1. The location of your home: Texas is prone to hurricanes, and past events have shown insurers that homes close to the coast or to large bodies of water are more likely to incur losses. Consequently, these homes are more expensive to insure against weather-related perils. Some inland areas – particularly around Dallas/Fort Worth – regularly get devastating hailstorms, which have intensified in recent years, and have subsequently caused big premium increases in those areas. There are also less obvious factors at play, meaning that some zip codes are consistently more expensive for insurance than others, which is related to past losses in an area and the complicated algorithms that insurance companies use to determine risk.
  2. The age of your home: The days of sturdy, stone-and-brick homesteads built to last hundreds of years are long gone. These days, the chance of something going wrong with your home starts to rise rapidly after about 10 years of age. Roofs become less weather-resistant and need replacing, plumbing and other internal systems are more likely to malfunction, and nearby trees grow larger and become more likely to topple onto your house. The equation is simple: older home = higher chance of a claim = more expensive insurance!
  3. The age of your roof: Today’s shingle roofs are designed to last about 15-20 years. Insurance companies know this, and will therefore charge a higher premium for older roofs, offer an Actual Cash Value policy only, or even refuse to insure your home at all. Tile or metal roofs have longer lives, but the flip side for insurance companies is that they cost more to replace if destroyed by a hurricane.
  4. Type of plumbing: Homes built before 1985 that have not been completely updated may still retain all or some of their original galvanized pipes. Statistically, these kinds of pipes are far more likely to corrode and develop leaks than modern PVC piping. If your home still has galvanized plumbing, you will have a smaller choice of insurance carriers, and premiums will be more expensive.
  5. Your “insurance score”: Whenever you get a quote, insurance carriers run an “insurance score” on one or both applicants. This is a bit like a credit check and takes lots of factors into account, but it does not affect your credit score in the same way that a loan application does. If your insurance score is low, you could be paying more for the exact same policy than someone who has a high insurance score.
  6. Prior claims: While there is some leniency towards weather claims (after all, a hurricane is not your fault!), insurance companies are wary of homeowners who have multiple claims on their record for things like water damage, theft, and – especially – liability. Any zero-paid-out claims (where the amount of the claim costs less than your deductible) can also hike your premium at renewal. So it’s best to make absolutely sure BEFORE you file a claim that it’s going to be worthwhile to do so – your agent will be able to advise you.

The golden rule is – as always – to give your agent a call! Memorial Insurance Agency’s licensed agents will be happy to provide you with a quote, help you to decide whether to file a claim, and answer any questions that you may have about insurance.

Smart Homes!

Travelers – a household name insurance company and one of our preferred carriers – has teamed up with Amazon to offer a free Amazon Echo Dot to every homeowner who switches their insurance to Travelers’ great new Quantum 2.0 product! Not only that, but homeowners can save money on a range of Smart Home products via the Travelers Amazon store.

10 Tips for Staying Safe this July 4th!

Ensure your Independence Day weekend is filled with celebration and not regret with these 10 fire safety tips, from the Federal Emergency Management Agency (FEMA):

  1. Be sure fireworks are legal in your area before using or buying them.
  2. Always have an adult supervise fireworks activities and never allow children to play with or ignite fireworks. Sparklers alone account for one quarter of emergency room fireworks injuries.
  3. If you set off fireworks, keep a bucket of water handy in case of malfunction or fire.
  4. If fireworks malfunction, don’t relight them! Douse and soak them with water then throw them away.
  5. Never ignite fireworks in a container, especially one that is glass or metal.
  6. Use your grill well away from your home and deck railings, and out from under branches or overhangs.
  7. Open your gas grill before lighting.
  8. Periodically remove grease or fat buildup in trays below your gas or propane grill so it cannot be ignited.
  9. Declare a three-foot “kid and pet-free zone” around the grill to keep them safe.
  10. Avoid loose clothing that can catch fire when cooking on the grill.

The Red Cross also has plenty of useful information and tips about firework, water, and picnic safety, at http://www.redcross.org/news/article/Have-a-Safe-Fourth-of-July.

Happy Independence Day everyone!

6 Reasons Why You Should Purchase Flood Insurance Right Now

As of July 2016, just 15% of homeowners in Houston carried flood insurance. This number has increased since Hurricane Harvey, but far too many homeowners in this bayou city are still without flood protection. Here is why you should purchase flood coverage:

Flood insurance is not included in your home insurance policy: Some people don’t even realize they are without coverage until the worst happens. Your home insurance carrier will deny all claims relating to rising waters entering the home.

Flood insurance is not expensive: With rates starting at just $349 a year for $100,000 in building coverage and $40,000 in contents coverage, flood insurance is the best value insurance that money can buy.

Disaster assistance is not enough to rebuild or elevate your home: Even a few inches of flood water can cause devastating and costly damage, and a handout from the government will likely cover just a small fraction of your expenses.

Flooding is unpredictable: Many homes that flooded during the Memorial Day floods in Houston in 2016 were unaffected by Harvey …. and vice versa. Urban development, weather patterns, and other factors mean that literally anywhere in Houston is at risk of flooding.

You’re grandfathered in: Flood maps in Houston are expected to change as more severe weather events become the norm. Buy a preferred zone flood policy now and keep it active, and you’ll keep the same low rate even if your neighborhood gets rezoned and premiums double.

Flood season is coming: June through October is when the most severe weather events occur in Houston. There is a 30-day waiting period after you purchase flood coverage before the policy takes effect, so get your protection in place before the rain arrives!