Securing the best options on homeowners insurance Pennsylvania requires a little legwork and some self-education. There are many variables which determine policy rates and several ways to mitigate pricing on a policy that is suited to meet your needs. With a wealth of information available to homeowners, the first consideration is whether to utilize an agent or do-it-yourself. Some carriers have direct-to-consumer options which allow you to receive a quote via an internet-based policy rating system. Other insurers have a network of independent or captive agents who will quote and bind coverage for your home, along with providing service on the policy as the need arises. With either distribution channel, it is essential to be prepared. Having a general knowledge about key factors and concepts when shopping for a homeowners policy will make the experience flow smoother and present you with some bargaining chips of which you may not have been aware.
How Important are Carrier Ratings?
Pay close attention to carrier ratings. It is likely that your home is one of, if not the biggest asset you own. Placing the dwelling’s protection in the hands of a sub-par carrier could mean slow claims payment, or in dire circumstances, no payment at all. All insurers in Pennsylvania are subject to a ratings system which judges the financial strength of each company, reflecting the ability to make claims payments. Based on criteria like policy reserves and prior history, independent organizations like A.M. Best affix ratings to each insurer with regard to creditworthiness, not unlike an individual credit rating. Best’s ratings apply a letter grade to every insurer resembling a report card: a range of A through B ratings indicate fair, good, excellent or superior financial health. Ratings that fall between C and F signify companies whose financial condition may not be conducive to meeting claims obligations. Balancing a company’s ratings with an acceptable premium will ensure that indemnification is complete and timely in the event of a catastrophic loss.
Do You Need an Agent?
There is a perception that savings can be optimized by leaving an agent out of the equation when shopping for a homeowners policy. Direct-to-consumer options are available by telephone or the internet. When pursuing these options, it’s prudent to gather essential details on your home prior to engaging in the process. There are several important factors applied to the development of homeowners rates.  How close is the nearest fire hydrant and fire station? What is the reconstruction value of your home? How much money would it require to replace your personal possessions? Having answers to these questions in advance will facilitate the do-it-yourself option, and identify areas that impact premiums.
Insurance agents are numerous in rural and metropolitan areas of Pennsylvania. An agent is professionally equipped to gather information on your home and guide you through the ratings process. He or she may have ideas to save money which may be overlooked when using the direct-to-consumer route. Affinity discounts may be available through memberships and associations. Bundling, or combining home and auto insurance with the same carrier, offers significant discounts to both types of policies. Before contacting an insurance professional, determine whether the agent is captive or independent. The value to using an independent agent is he or she will likely be appointed to quote with multiple carriers to find coverage and rates which best suit your needs. Captive agents generally represent only the company with whom they contract, yet rates can be attractive owing to the size and financial strength of those insurers.
What Other Factors Determine Homeowner’s Rates?
Prior claims history and individual credit scores have a major impact on homeowners rate composition in PA. While claims experience is more clear-cut with regard to rates, credit matrices used by carriers to develop premium are proprietary and shrouded in mystery. A high FICO score may not necessarily translate into an optimal rate due to the amount of open credit an applicant might have, or the number of creditors outstanding. Yet in general, better individual credit management means lower premiums.
The number of homeowners claims paid in the past three to five years affects quotes, but generally the extra premium required is easier to assess. One past claim may impact premiums by 25% whereas two paid claims may increase rates 50%, and three or more may double premiums or even disqualify an applicant altogether from qualifying for coverage. It’s also important to note that claims incurred but not paid may have an adverse effect on rates. Merely inquiring about a potential claim could leave a black mark on your record, even if no reimbursement was ever received.
What Can You Do to Lower Rates?
One of the largest decremental factors to insurance rating is the deductible piece. The more willing you are to accept greater out-of-pocket liability, the less costly your premium will be. While $250 deductibles were once the norm, policyholders are raising deductibles to $1000 or greater to control costs associated with coverage.  It is important to remember that homeowners insurance is not designed to indemnify every small loss that you might suffer. Rather, coverage is secured to protect policyholders from catastrophic losses which can create debilitating financial consequences. Therefore, submitting frequent claims when those losses can be paid from savings will not bode well when switching companies, or renewing with your present company.
Look around your home for potential hazards. Almost all insurance companies in PA require that swimming pools be fenced with locking gates. Trampolines require a barrier to prevent falls. Do you own a dog? Certain breeds may require additional premium and in some cases applications will not be considered, or policies may be non-renewed if the dog falls on a prohibited list.
Obtaining homeowner’s insurance in Pennsylvania isn’t overwhelming. And while certain factors can’t be controlled or easily altered —   the age of your home or its exterior construction material — it will behoove you to consider the conditions you can influence before seeking a new insurer, or renewing your current contract.
2 Point Highlight
Prior claims history and individual credit scores have a major impact on homeowner’s rate composition in PA.
Balancing a company’s ratings with an acceptable premium will ensure that indemnification is complete and timely in the event of a catastrophic loss.
