Four Factors Affecting Homeowners Coverage you may not know

When shopping around for homeowners insurance, most buyers consider the most common risks involved in home ownership and their relationship to the premium they will have to pay. These risks, known as perils, are generally covered by a standard homeowners insurance policy. They can include fire damage, water damage, broken windows, weather damage, theft and accidents to third parties. What a homeowner may not be aware of are special, uncommon situations that are not included in a basic policy and should be taken into consideration when looking for coverage that best suits your needs. These details can have a positive or negative impact on the premium you end up paying. 


Though man’s best friend is a common part of the family unit, certain types of dogs can raise premiums on homeowners insurance policies. Though some states are considering a prohibition on this type of “discrimination”, many insurance companies continue to consider certain dog breeds as perils, either because of a destructive or aggressive nature. Having one of these breeds may involve a claim filed for a destroyed door or a bitten neighbor.

Of the over ten breeds that insurance companies consider risks, one can find German Shepherds, American Pit Bulls, Chow Chows and the Siberian Husky. Though these mascots may be a docile member of the family, insurance companies rely more on statistics than family anecdotes and may raise premiums accordingly. Before deciding on a homeowners insurance policy, you should be clear about what your pet may end up costing you in higher premiums. 

Previous claims on the home

Insurance companies keep records on claims made to them. These claims are added to the Comprehensive Loss Underwriting Exchange (CLUE) and other databases. When preparing a policy contract, the insurance company will check CLUE to see if any claims have been made on the home you are planning to purchase. They will also check your record of claims on any previously owned property.

Some companies include inquiries a claims as well. If a homeowner telephones with a claim for something that has been damaged and then decides to repair it himself, the insurance company might file that “claim” as unpaid. It remains on the record as a claim.

While a purchaser cannot attain a CLUE report for a home they plan on buying, it is a good idea to ask the seller for a copy of this report. Claims that run from a broken water-heater paid by the insurance company to a window replacement paid by the owner to avoid the deductible are recorded and sometimes held against the purchaser. With just two claims on the seller’s part and one claim on the purchaser’s part, an insurance company can either deny you the policy or raise the premium. 

Fire station location

If your home is located near a fire station, you will find that your premium can be reduced. Even having a fire hydrant within yards of your house can be a plus when negotiating what you will pay. Some insurance companies will raise the premium if the fire department is manned by volunteers instead of trained professionals. Be sure you get clear information on the policies of the insurance company on fire station locations in relation to your new home. 

Alarm system discounts

Any type of alarm system that protects your home also protects the insurance company from possibly paying out on claims. For this reason, many insurance companies will reduce premiums to homeowners who have installed smoke or entry alarms. Even simple details such as dead-bolt locks serve as a security measure that not only protect the homeowner but can also lower the premium. If a fire or theft is prevented thanks to an alarm, the insurance company saves money and is likely to pass that savings on in lower premiums for the alarm owner.

Insurance companies base their business on spreading costs across groups with similar risks. In the case of homeowners, those risks can be general to all homes. When the risk is outside of the norm, the cost of a claim to the company is not compensated by this spreading and you will probably be charged an additional premium. On the other hand, if you actively take part in protecting your property, or your property is adequately protected through local services such as a professional fire department, you can see your premium lowered satisfactorily.