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How is a homeowner’s premium determined?

Rates are based on the following factors:

  • Location of dwelling
  • Replacement cost of dwelling, contents and other permanent structures
  • Liability limit selected
  • Deductible (both standard and wind/hail) selected 
  • Fire Protection — ISO Protection Classifications are used to categorize the qualities of the local fire department, access to water sources and equipment. There is a surcharge for risks in higher protection classifications to reflect the increased potential for damage as a result of a fire. In most states, there is a suburban rating rule that allows an insured to qualify for a reduced rate. If the home is five road miles or less to the fire station, and there is not a public hydrant within 1,000 feet of the main dwelling, then the risk is subject to a lower protection class if ALL of the following conditions are satisfied:
    • There is a year-round alternate water source directly accessible to fire equipment (directly accessible means within 20 feet or less of a hard packed road surface).
    • The water source contains at least 10,000 gallons of water year-round.
    • The water source is within 1,000 feet of the main dwelling.
    • The fire department is located within five miles of the main dwelling and has the equipment necessary to draft from the water source.
    • The source can provide a continuous flow of water of 500 gallons per minute for at least 20 minutes.
  • Construction Type — risks are categorized as one of the three construction types below. Masonry and Fire Resistive construction types qualify for premium credits.
    • Frame—The dwelling must be structurally composed of non-fire resistive wood members with an exterior covering that is typically wood siding or veneer.
    • Masonry—The dwelling must have exterior walls built of solid masonry or other fire resistive materials.
    • Fire Resistive—The dwelling must have exterior walls, floors, roof cover and roof structure built of solid masonry or other fire resistive materials with a rating of two hours or more.
    • Brownstone rates are available in certain states. The Brownstone must be an owner occupied row-house with no more than 1 rental unit and must meet the following criteria: Masonry Construction, Built prior to 1940, and Renovated plumbing, heating, and electrical systems.
  • Claims History and Years with Carrier — in most states, an insured who has been a client of a company for multiple years or has a loss-free history may qualify for a reduced premium. An insured with one or more claims may incur a premium surcharge.