Whether you need homeowner’s insurance in Park Slope, renter’s insurance in the Bronx, or landlord insurance on the Upper East Side, insurance companies look at many of the same factors when calculating your premium.
The good news: You can make those factors more attractive to your insurance company—and lower your insurance premiums.
What Insurance Companies Consider
Location, age and type of building. Insurance companies divide the city and state into many rating territories. They look at crime statistics, fire protection and other community factors. They also calculate costs to rebuild your home or building in the event of a fire or other disaster. Although you can’t change any of those factors, you can research insurance costs when considering possible homes or apartments.
Amount and scope of coverage. It stands to reason that insurance on a million-dollar home filled with antiques and jewelry will be more expensive to insure than a more modest home. If you have collectibles or other valuables, a good insurance broker can steer you to insurance companies that specialize in insuring valuables such as yours.
Use of building. The same building used for residential or commercial purposes will have two very different premiums. For commercial or mixed-use buildings, the type of business(es) affects premiums as well.
Deductibles. The deductible is the amount you’ll pay in the event of a claim. With a $250 deductible, for instance, you would receive the claim payment for the loss, less $250. The lower your deductible, the higher your premium. If you can afford a higher deductible, such as $1,000, the insurance savings can be significant.
Discounts. Discounts vary by insurance company, but may include savings if a home, apartment or commercial/multi-family building has dead bolts, security systems, storm shutters, sprinkler systems or other safety/security items. Many companies also offer a multi-policy discount for customers who purchase homeowner’s/renter’s insurance and automotive insurance with the same company.
Credit Ratings and insurance
An insurance company may also use a consumer’s credit information to decide whether to issue a policy and how to price it. If the company uses that information, it must:
- Send a notice disclosing this fact, with the name of the credit reporting agency or agencies that provided the information.
- Provide notice that your premium is higher than it would have been if you had a higher credit score, and explain the factors that affected your score.
- Disclose that, if you find an error in your credit report, you have the right to contact the credit reporting agency to correct it, which may lower your premium.
Insurers must review your current credit information once every three years at your request. In addition, insurance providers may not terminate a policy or increase a renewal premium based upon changes in credit information.
To protect yourself, check your credit reports regularly, and contact the credit reporting agency if you find any errors.
Consumers may receive one free credit report from the three major rating agencies here.
How to Be in the Know
A good insurance broker can help you make an informed choice by offering advice on insurance premiums before you decide to buy or rent. If your choice comes down to 2-3 different communities, ask a broker how premiums might differ for similar housing in each one.