Does where you live impact your insurance rates?

The short answer to the question posed in this post’s title is, yes.  Where you live influences the rate you pay on home and car insurance.  The premium difference between different areas is greater for home insurance than car insurance.  The real question that needs to be answered is why the difference in premium if everything else is roughly the same, such as;

  • Credit
  • Size, style & valuation of home
  • Claim activity

According to an article in the Dallas Morning News, if these items were the same, the premiums on the home policies could vary as much as;

  • $376 a year more for the home in Arlington than the home in Plano
  • $272 a year more for the home in Richardson than the home in Irving
  • $296 a year more for the home in Arlington than the home in Garland

Home insurance premiums will vary geographically, even between zip codes, for a number of reasons including;

  • Fire protection class codes
  • Crime rates
  • Home age
  • Weather patterns

Fire protection class codes are ISO (a New York advisory organization) codes ranked from 1 (very best) to 10 (very worst).  The lower the ISO number, the lower the home insurance premium.  Fire protection class codes vary in the D/FW area from a 1 to a high in the 5 to 7 range for a couple of the unincorporated areas in Dallas County.

Crime rate will also influence premium.  Areas with a higher crime rate pay more for home insurance than those with a lower crime rate.  If you’re in an area with a moderate to high rate, consider getting an alarm system.  This provides a modest discount and may provide increased peace of mind.

Home age can have a large impact on home rates.  For companies that weigh the age more heavily, new homes cost less to insure than older homes.  How much weight insurance companies give to a younger verses older home varies from company to company.

Weather patterns, especially catastrophic losses such as hurricanes (Houston & the coast) and the hail / tornadoes of this year in the D/FW area lead to the type of premium differences in the DMN article.  Hail doesn’t fall in a uniform fashion any more than rain does.  Tornadoes can hit one area and bypass another.  The unit of measurement that exists for weather at this time is zip code; what the amount of claims was in a given zip code.

Combine these factors together and realize that insurance rates change – whether or not you have a claim!  Everyone I talk with is surprised at this, but premium are not static, the price of everything changes.  So what are savvy consumers to do?

  • If you’ve been with the same insurance company for 3 years or more, review your insurance and compare it with other companies.
  • Form a relationship with an independent insurance agent who can review multiple options on your behalf.
  • Confirm your deductibles are where you want them & understand what that means in dollars to you if you have a claim.
  • If your home insurance is with one company and the car insurance with another, see if it makes sense to combine them; sometimes it does and sometimes it doesn’t.

We’re happy to review your Texas home policy and provide advice.  Want a home insurance quote?  Click this link, and we’ll work one up for you to review.  If you have a question, post it on our Facebook page and we’ll get you an answer.

Evie Wise
Evie Wise


Evie Wise
Evie Wise

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