Home Insurance Factors Your Customers Aren’t Thinking About

Home insurance rates can vary from one location to the next, and across all types of houses. A cheap home, for instance, is not a clear indicator that the insurance will be cheap as well. Recently on Reddit, an insurance customer posed this question:

“Can anyone tell me why I might be getting such high quotes for home insurance? I’m buying a $55k home and most places are quoting me around $1,100 a year for homeowner’s but everyone else I talk to are insuring their $250k houses for about $600 a year. Is it because I don’t have much of an insurance history? I have gotten quotes from probably 6 different insurance companies.”

This is not an isolated situation, and chances are your customers and/or potential insurance leads will be wondering the same thing at some point in their home-buying lives. The puzzlement stems from several home insurance factors they’re simply not considering. Here are some of the ones that are most overlooked.


1. Location to the nearest fire station.

A homeowner’s rates will be affected by the distance it is situated from the nearest fire station. Customers may not realize, but that’s why an area’s rates can go down whenever a new fire station is added to the community. It improves the ISO rating, thus marking the home as a safer place to live. In other words, underwriters love the fact that if there’s a fire, the home won’t burn to the ground by the time the fire trucks arrive.


2. Susceptibility to natural disasters.

Even within the same state, a home can experience higher rates based on weather patterns and the history of susceptibility to natural disasters. If one lives in a coastal area that invites a lot of hurricane and tropical storm activity, for instance, it can send rates up rather quickly. The same goes if a home is located in a frequent tornado hotspot.


3. Age of home.

Older homes are more likely to encounter problems and require improvements and upgrades in order to maintain their value. The more faulty things occur, the more likely the customer will have to file a claim, and that naturally sends rates pushing upward. Ideally, an insurance customer who buys an older home will make routine repairs and maintenance an ongoing part of the monthly budget. That way, the house can stay modernized and in great shape.


4. Protection features.

Sprinklers, smoke alarms, burglar alarms, fire extinguishers, CO/smoke detectors — all of these things can help a home’s insurability. Making sure that customers are aware of these improvements is a great way to help them improve rating factors.


5. The Insured’s past activities.

Bad credit and frequent claims can play a role in escalating home insurance prices. While not every state allows credit to be a factor, most do, and claims will jeopardize affordability no matter where one lives within the U.S. Emphasize to your customers that small fixes and repairs are better done out-of-pocket and that insurance is there to serve as a guard against major catastrophes. Also, emphasize the importance of paying bills on time, paying at least the minimum payments, not accruing credit card debt, and paying things off in a timely manner.


In Summary

While most home insurance customers are able to learn the above factors as they go along, it’s far more advantageous that they know before ever stepping foot in their first house as an owner. By helping to quell the questions and shining light on this complex issue, you can make yourself indispensable to clients and win referrals.

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