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Learning Center
Key factors carriers use when pricing auto and home policies and what you can do about each one.
Insurance carriers price risk individually. Two households with similar homes or vehicles can pay very different premiums based on factors that go well beyond basic coverage type. Understanding what drives your rate helps you set realistic expectations, make smarter coverage decisions, and identify real opportunities to lower your premium at renewal. Here is what actually moves the needle.
Filing multiple claims in a short period signals higher risk to carriers and typically raises premiums at renewal, sometimes significantly. Many carriers surcharge for two or more claims within three to five years. The surcharge can range from 10 to 40 percent depending on the claim type and your carrier. Water damage and liability claims tend to trigger larger increases than weather-related losses. This does not mean you should avoid filing legitimate claims, but small claims close to your deductible value often cost more in future surcharges than they return in settlements. A $1,500 water leak claim that costs you $500 after the deductible may trigger a $200-to-$400 annual surcharge for three years, a net loss of $100 to $700 compared to paying out of pocket. When in doubt, call your agent to evaluate the likely premium impact before filing.
Tickets and at-fault accidents raise auto insurance rates, and the effect typically lasts three to five years depending on the carrier and the severity of the violation. A single speeding ticket can increase premiums 10 to 25 percent at renewal. An at-fault accident with injury can raise rates 30 to 60 percent or more. A DUI conviction can double premiums or result in non-renewal, requiring placement in a non-standard market. Safe driver telematics programs such as Safeco's RightTrack, Progressive's Snapshot, or Travelers IntelliDrive can offset rate increases for drivers with otherwise clean recent records by rewarding actual safe driving behavior. If your driving record has improved over the past few years, re-shopping your auto policy at renewal often surfaces a meaningfully better rate.
Most carriers in the states we serve use a credit-based insurance score, a version of your credit profile weighted toward insurance-relevant factors such as payment consistency and account age. This is distinct from your standard FICO score but correlates with claim behavior across large policyholder populations. Studies by the Federal Trade Commission and multiple state insurance departments have confirmed that lower credit-based insurance scores are associated with higher claim frequency and severity. Pennsylvania, Maryland, Virginia, Ohio, Tennessee, Kentucky, and Texas all permit credit-based scoring for both auto and homeowners insurance pricing. Texas (Insurance Code Chapter 559) applies the same rules to both lines and requires specific disclosures when credit information is used, but does not prohibit it. Improving your credit over time gradually lowers your insurance pricing. If your credit has improved significantly since you last shopped, a fresh quote comparison often produces a lower rate without any change to your coverage.
Roof age is one of the single largest pricing factors for home insurance, and it is often underestimated by homeowners. Many carriers begin surcharging for roofs over 15 to 20 years old, with some applying actual cash value (ACV) settlement provisions to older roofs instead of replacement cost coverage. ACV means a 20-year-old roof that costs $15,000 to replace might be settled at $4,000 to $5,000 after depreciation, leaving you with a significant out-of-pocket gap. Carriers in hail-prone states like Texas can be especially restrictive: some will not write new policies on roofs over 10 years old in high-hail ZIP codes. A roof replacement often reduces home insurance premiums enough to partially offset the cost over the following five to seven years.
Where your home sits determines a significant portion of your premium. ZIP code factors include proximity to a fire station (homes more than five road miles from a responding station pay more), local wildfire risk, crime rates, and regional weather exposure. A home in a Texas hail corridor carries substantially higher wind and hail exposure than a similar home in Virginia. Flood zone designation affects whether a separate flood policy is required by a lender and influences overall carrier appetite for writing in an area. Proximity to a brush or wildland-urban interface raises wildfire loading in applicable states. None of these factors are under your direct control, but they explain why identical homes in different ZIP codes have very different premiums and why re-shopping every few years matters as carrier pricing in specific markets shifts.
Higher coverage limits mean higher premiums. But two less obvious factors also matter: insuring to replacement cost vs. actual cash value, and your deductible amount. Choosing ACV instead of replacement cost coverage lowers your premium but dramatically reduces your payout at claim time. For most homeowners and personal property owners, replacement cost coverage is the right choice. Deductibles are a direct lever: a home policy with a $2,500 deductible typically costs 10 to 25 percent less than the same policy at $500. Raising your deductible to a level you can comfortably pay from savings is one of the most reliable ways to reduce premium without reducing meaningful coverage.
For auto insurance, the vehicle itself significantly affects your rate. Vehicles with high theft rates, expensive parts, or high injury claim frequency in their safety class cost more to insure. Newer vehicles financed through a lender require comprehensive and collision coverage (adding $600 to $1,200 or more annually). Older vehicles paid off in full may not need comprehensive and collision if the vehicle's value is low relative to the cost. A general guideline is to drop collision if the annual premium exceeds 10 percent of the vehicle's current market value. Electric vehicles typically cost 40 to 50 percent more to insure than comparable gas vehicles, driven by higher parts and repair costs and more expensive battery replacement after collisions.
The most effective tactic is to re-shop at renewal. Carrier pricing changes annually, and the carrier that was cheapest three years ago may not be today. Maintain a clean driving record. Improve your credit over time. Update your roof before it crosses into the surcharge zone. Ask about available discounts at every renewal: safe driver telematics, multi-policy bundling (10 to 20 percent), new home, loyalty, security systems, paperless billing, and pay-in-full discounts all reduce premiums. We re-shop our clients annually across 30+ carriers to confirm their rate is still competitive. If it is not, we move them.
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At-fault accidents and DUI convictions cause the largest auto insurance rate increases, often 30 to 60 percent or more for a single at-fault accident, and up to 100 percent or policy non-renewal for a DUI. Multiple speeding tickets in a short period also have a significant compounding effect. After driving record, credit-based insurance score and vehicle type are the next largest pricing factors for most carriers.
Usually yes, especially for claims you caused (water damage, liability) or multiple claims in a short period. Most carriers surcharge for two or more claims within three to five years. Weather claims (hail, wind) are treated more favorably but can still affect rates if you have multiple in a short window. Small claims close to your deductible often cost more in future surcharges than the payout is worth. Call your agent before filing to evaluate the impact.
The impact varies by carrier and state, but drivers and homeowners with poor credit can pay 50 to 100 percent more than those with excellent credit at some carriers. Credit-based insurance scoring is permitted in most of the states Dragon serves. Improving your credit from poor to good can reduce premiums significantly over two to four years as your score improves.
Most carriers begin applying surcharges or restricting coverage for roofs over 15 to 20 years old. Some carriers in hail-prone states (Texas, Oklahoma) apply restrictions at 10 years. A roof over 20 years old may be settled at actual cash value rather than replacement cost, which significantly reduces your payout after a covered loss. Replacing a roof before it crosses into the surcharge range often reduces premiums enough to partially offset the cost.
If the accident is not your fault and the other driver's insurance covers the claim, your rate should not increase at most carriers. However, some carriers do raise rates for not-at-fault accidents if you have a history of multiple claims, regardless of fault. If the other driver is uninsured and you file under your own uninsured motorist coverage, carrier treatment varies. Most do not surcharge for UM claims, but some do. Ask your agent before filing.
Re-shop your policies at every renewal. Carrier pricing changes annually. Ask about all available discounts: multi-policy bundle (10 to 20 percent), safe driver telematics, security systems, new roof, pay-in-full, and paperless billing. Raise your deductible to the highest level you can afford to pay from savings. Improve your credit over time. None of these changes reduce your coverage.