Most insurers consider a home's age, square footage, and construction materials when determining premiums. Older homes are often more expensive to insure because bringing electrical, plumbing, or roofing systems up to modern codes is costly after a loss. Brick and masonry homes tend to receive better rates, while more common wood-frame construction in New England is priced differently.
Even within the same city or town in Rhode Island, your location can affect your rate. Even if you may think you don’t live in a coastal community, insurers consider your proximity to the coast when calculating your coverage. If you’re in a FEMA-designated flood zone, you’ll also need separate flood coverage.
Your policy is based on the cost to rebuild your home, not its market value. This is one of the most misunderstood aspects of homeowner’s insurance. Labor and material costs are the highest they’ve been in decades, so the cost to rebuild is likely greater than your purchase price. That’s why it’s important to ask your agent to run a replacement-cost estimate for your home every few years.
A roof over 20 years old may result in higher premiums, limited coverage, or even difficulty finding coverage. Some companies will pay only actual cash value (depreciated value) rather than replacement cost for older roofs. If you’ve recently replaced your roof, make sure your agent knows.
Older electrical systems, particularly knob-and-tube and aluminum wiring, are considered fire hazards and can make your home harder or more expensive to insure. Plumbing materials such as polybutylene, galvanized steel, or lead significantly increase homeowners’ insurance rates because of a higher risk of leaks and water damage. Oil heat is also treated differently from natural gas or electricity. If you’ve updated your systems, you need to let your agent know.
Insurers typically review your prior claims, going back five to seven years. Multiple claims, even small ones, signal higher risk. That’s why homeowners may want to think carefully before filing a claim for minor damage. Sometimes paying out of pocket for smaller repairs may be the smarter long-term financial decision. Your agent is available to help you determine what may be in your best interest.
In Rhode Island, insurance companies may use a credit-based scoring as part of their rating methodology. If your credit has improved significantly, it’s worth asking your agent to re-run your credit. However, many homeowners may not realize that they have the right to request that an insurer not use their credit score in certain circumstances, such as after a major life event like a divorce, job loss, or medical hardship.
We may not think that our furry friends are liabilities, but insurance companies consider certain breeds “attractive nuisances” that trigger exclusions or surcharges on your liability coverage. You may consider a Siberian Huskie or even a Dalmatian to be a safe breed, but your insurer may think otherwise. Pools, trampolines, and even hot tubs increase the risk of injury and should always be disclosed. Some carriers require specific safety measures, including fences and locked gates, as conditions of coverage.
You have more control here than most homeowners realize. Raising your deductible is one way to lower your premium. Bundling your home and auto policies with the same carrier is a sure way to receive a discount of up to 20%. Installing monitored smoke detectors, a security system, or water leak sensors can also earn credits with carriers.
Your homeowner’s insurance premium isn’t arbitrary, and the good news is that many of these factors are within your control. If you haven’t had a proper coverage review recently, or if your rate has jumped and you don’t understand why, your independent agent is here to make sure you’re properly protected.
