Many neighborhoods in New Hampshire have very similar houses, so you assume you pay about the same for homeowner's insurance as your neighbor, but is this true? Here are some of the factors that may be behind the premium differences:
In New Hampshire, Why Do I Pay More for Insurance Than My Neighbor?
You Have Different Insurance Companies:
If you were to Google the least expensive home insurance company in New Hampshire, you would get an answer; however, that answer is only as good as the day it was searched and based on broad generalities.
Most home insurance companies in NH have to file their rates, including surcharges and discounts, with the NH Department of Insurance whenever they want to change what is charged to policyholders. If a home insurance company is having a very profitable year, you may see a premium decrease the following year to further boost sales. If a company is seeing a loss, premiums (and underwriting) will most likely increase. Your home has not changed at all, but your company may decide to adjust what you pay regardless.
Also like many things purchased, different insurance companies have different business models and focus on specific segments of the overall home insurance market. Some insurance companies are competitive in high-end homes, while others prefer mobile homes. Some companies are a better fit for older homes, while others are competitive for new homes with the latest technology and modern construction.
Most insurance companies will write coverage for a home that is in good condition and without prior claims, but whether it is the best place for a specific home is another question. That is where an independent insurance agency
You Have Different Coverage:
Your home was built by the same builder in the same year and is essentially the same, yet you pay more- why?
The benefit of using an independent insurance agent is that they can help you customize your insurance to what matters to you. As you may (or may not) care about certain risks, it can cause a difference in what is paid.
For example, you want jewelry insurance to cover your wedding rings while your neighbor doesn't. Jewelry insurance is often added to home insurance policies, so depending on the value and size of the schedule, it can make a difference in premium.
NH Umbrella insurance can be written as a separate policy or added onto the home insurance, depending on the insurance company's practice. As an umbrella can provide at least an additional $1 million of liability coverage, with rates being impacted by the number of homes, vehicles, drivers, driving records, boats, and other personal toys, rates can vary significantly.
Other coverage that can impact premium is earthquake coverage, equipment breakdown, identify theft, and many others.
Many other coverages can be added to a NH home insurance policy, so be sure you are talking apples to apples before assuming you pay a lot more for no reason.
You Have Different Deductibles and Limits
Within policies themselves, deductibles and limits are two of the main factors that influence the premium.
Deductibles are how much you pay out-of-pocket before a policy covers any claim—raising these results in lower premiums, which can be a responsible way to reduce your premiums if you can afford a higher deductible.
The amount of coverage on your home is a significant factor in what is paid in premium. It is vital to have this limit as accurate as possible to ensure you have the coverage needed in a loss, but not too much, so you are overpaying. If it has been several years since you spoke with your insurance professional, reach out to ensure your coverage is adequate. Did you add a finished basement, upgrade the kitchen, add on a deck? All of these things will impact the amount of coverage needed. From the outside, you and your neighbor's house are the same, but are they really?
You Have Different Credit Scores
It is easy to forget that insurance companies in NH are allowed to use your credit score as a factor in determining what you pay in premium.
Though discouraging for some, it is important to understand how NH Insurance Companies Use Credit Information and what you can do to get the most credit possible.
You’re Considered a Higher Insurance Risk
Even if every variable in your and your neighbor’s insurance policies were identical, you might still be charged higher premiums if you’re deemed to be a higher insurance risk.
As insurance companies do not have a crystal ball, they depend on the past to predict the future, which can be uncovered in prior claims.
Some claims are random and unavoidable, such as a lightning strike that shorts out all your electronics; however, others may more predictable or at least avoidable. What if you never lock your door and have had two thefts in the last several years, while your neighbor has an alarm and never had a robbery?. What if you never clean your chimney and have a chimney fire, while your neighbor gets theirs cleaned every year and never had a fire.
Bluntly put, you cost the insurance company more money which will mean you pay more to make up for this difference. You may also note that an insurance company is not obligated to provide homeowner insurance if they do not meet their underwriting guidelines. If there are more than two claims over a few years, you may not just pay more; you may not even be able to get insurance, depending on the situation.
You Don't Have an Independent Agent
Insurance can be so confusing that you don't want to think about it any more than you have to. That is why having an insurance agent is an excellent way for you to get the coverage you want, understand what you are buying and re-shop your policy if necessary.
As mentioned, rates change over time, and what is a great fit for your home insurance now, may not be in several years. Insurance Agents have the insight to know who is competitive, for what type of household, and what a reasonable rate is. A good agency, like HPM Insurance, will review the coverage each year and let you know if a re-shop is warranted.
To speak with an independent insurance agent in New Hampshire, contact HPM Insurance. We’ve helped many state residents find affordable insurance solutions, and we’re ready to assist you.