When shopping for homeowners insurance there are many, many factors that go into the pricing of a policy. You are probably aware of some of them already: Claim history, size of the home, construction and age of home, proximity to a fire hydrant, and distance to a fire department are fairly well-known items. However, Matthew S. Desaulnier, president of Gerardi Insurance said you may be surprised about some of the other things that can make a huge difference.
Desaulnier said the thing that could have the biggest impact is personal credit history. Not only does this affect your mortgage, but it also has a huge effect on your homeowners insurance acceptability and pricing.
"We have seen two people who live next door to each other with the same home, same insurance carrier and one person is paying $1,000 more per year than the other simply due to the fact that they had a very poor credit history and their neighbor had great credit," Desaulnier said. "Moral of the story: Take care of your credit. It matters!"
Another thing that can make a big difference in your pricing of a homeowners policy is your deductible. A deductible is a specified amount of money that the insured must pay before an insurance company will pay a claim. The higher the deductible, the lower the cost of the insurance.
"Keep in mind the homeowners insurance policy is not a maintenance policy. You may never have a homeowners claim in your life so I always recommend taking the highest amount you would feel comfortable being able to cover the event of a disaster. For most, this is $1,000," Desaulnier said. "A higher deductible will also keep you from being tempted to put in smaller claims to your policy that could result in massive premium increases for future years."
Finally, most insurers will do some sort of inspection of the property after the policy is written. Showing pride of ownership will not only make your life easier from petty insurance company recommendations but will actually get you access to more preferred homeowners carriers and underwriters that put a huge emphasis on pride of ownership. Hence, lower rates.
However, when choosing a policy, Desaulnier warns against using cost as your main criteria.
"Do not be 'penny wise and pound foolish.' An insurers claim performance as well as an agent’s expertise and ability to advocate on your behalf if a claim issue occurs matters," Desaulnier said. "Do not discount this as it could be the difference between a claim being covered or not. You may think you have a great deal in the beginning but when you have a claim, you may realize you have been sold an empty promise. To save a few dollars per year may not be worth it in the long haul. Do some research and always choose someone you feel comfortable doing business with."
Matt Desaulnier has been in the industry and with Gerardi Insurance since 1996. He is a graduate of Bryant University, a Certified Insurance Counselor (CIC), and a Charter Property Casualty Underwriter (CPCU). Matt is very involved with many local organizations and community activities including President of the Putnam Business Association, Northeastern CT Chamber of Commerce Board of Director, Board of Director at the Westcott Wilcox Elderly Residential Housing, and a Board of Director of the Quinebaug Valley Community College Foundation.