Why Is My Homeowners’ Insurance Premium So High?
It is no surprise that homeowners’ insurance can be expensive, but all Texas residents need it in order to feel confident about their security. As a homeowner, it is your responsibility to understand rates, premiums, and influencing factors. We want you to be completely in the know about your homeowners’ insurance rates, which is why we have gathered all the must-know information for your convenience:
- While insurance companies are required to file their rates with the Texas Department of Insurance, there is no requirement obligating them to receive approval before enforcing those rates. This file and use system goes with the Texas law that requires insurance companies to offer adequate, reasonable, and non-excessive rates to their insured. If the Texas Department of Insurance determines that rates go against these guidelines, they can force the insurance company to offer refunds to their policyholders.
- Did you know that the age and condition of your home is a high influencing factor for premium amounts? Your rates will be dependent on the replacement cost of your home. Likewise, the materials used to build your beautiful home will also be calculated in determining its replacement value. If your home is a frame home, you can expect higher rates than someone with a home constructed of primarily brick.
- Many homeowners are unaware of the fact that where they live affects their premium amount. If you live in an area with high crime rates and high storm activity, you can expect a higher premium than your friend who lives in a family neighborhood located next to a highly appraised school. Likewise, homeowners who live in a community with a low PPC (Public Protection Code) have less expensive homeowners’ insurance premiums. For example, policies in Plano or Frisco with the lowest PPC of one are cheaper than policies for properties in Carrollton which has a rating of 3.
- Another influencing factor that many homeowners are unaware of is their credit score. Your financial responsibility is reflected in your credit score, which is why most Texas insurance providers look at this number to determine your premium rates. Spend a little money with a credit advisor to clean up some delinquent payment history and your premiums on home and auto will be improve greatly.
Please do not hesitate to give us a call if you are concerned with how your homeowners’ insurance premium is being calculated. Serving Carrollton, Coppell, Plano, Frisco and all of North Texas, contact Mike Leonard Insurance Agency for all of your homeowners’ insurance needs.