What Factors Impact Rates
When applying for homeowners/renters insurance, insurers evaluate your risk and the likelihood you will file a claim. This is referred to as underwriting a risk. Once your level of risk has been determined, the insurer will group you with policyholders that have similar risk characteristics. Then, the insurer will assign a rate based on the claims history for your risk group. Some of the factors that are considered are:
- Territory – Typically, the county in which you live.
- Type of Construction: - Frame, Masonry , etc.
- Age of Your Dwelling - The year the house was built.
- Fire Protection Class – Distance from a fire hydrant and the quality of your local fire department.
Insurers are NOT allowed to use your credit history as reason to refuse to provide you coverage, cancel your policy or determine your premium.
Why have my Homeowners Insurance rates increased, and what can I do about it?
The Maryland Insurance Administration (MIA) has heard from consumers that their homeowners insurance rates have increased even though they have been with their insurer for a long time and have not filed any claims. Consumers want to know why this has happened. They also asked what can be done about these increases. This
advisory will try to answer these questions to help you better understand the increases and offer some suggestions that might help you lower your insurance costs.
Shop Around!
Comparison shopping is the key to getting the most for your insurance dollar. The best time to shop for insurance is well before your current policy renews, you purchase a new house, or you make a major addition to your house. We have resources and tips on how to shop around.
Additional Resources:
