When an insurance company wants to change its rates, it must file enough financial and statistical data with our office to prove that the change is justified. Our office tries to hold down rates by carefully reviewing these requests. Last year, we saved homeowners more than $5 million compared to the companies’ original rate proposals.
As an individual consumer, you may be able to save more. Insurance companies consider many factors when setting homeowners’ rates. By understanding how these factors affect your premium and by shopping around, you can save significant money.
They calculate homeowner insurance rates by starting with a dollar amount (base rate) and adjusting your rate according to a variety of factors.
Most companies consider the following:
- Territory rating: Rates vary based upon the geographical location of the house. Some areas are more prone to wind damage or water damage. The crime rate and emergency response time in an area also can impact your rates.
- Construction: Rates vary based on the type of house construction. Wood construction is more prone to fire and other types of loss than concrete or brick. Masonry structures are more at risk to damage by an earthquake than wood structures.
- Amount of Insurance: Your premium will vary depending on the replacement cost of your home. Keep in mind that the cost to actually rebuild your home may exceed its current market or sales price. Talk to your agent or company to determine if you have the right amount of coverage.
- Credit History: Washington state has one of the toughest laws restricting how insurance companies use credit history. But your insurer still may use information in your credit history to determine your rate.
- Claims History: Some companies may charge you more based on the number or types of claims you file. They may even cancel your coverage due to one or more claims. Talk to your agent or your company to find out how they treat claim history.
Remember, just as insurance companies differ in what they charge you for coverage, they also differ in the skill, care, and how quickly they settle claims. It pays to shop around.
- www.insurance.wa.gov -