Insurance Info

Wait, credit affects how much I pay for insurance?

Amazingly, a lot of people don’t know this.  But if you start to think about it, it makes a lot of sense.

Credit, and by this I of course mean your credit score, makes a big difference in a ton of things in your life.  I could go on but this isn’t a financial literacy blog.

I’m no Dave Ramsey.  Though I do have better hair.

Sorry, Dave.

Regardless of follicular superiority, credit does indeed help your insurance costs.  Let’s go over the ways that good credit can save you a bundle.

Credit determines the kind of auto policy you can get.

A lot of people aren’t aware that insurance companies break customers into one of two camps: Preferred and Standard.  There is nothing wrong with being standard – it literally means you’re like most people.   But preferred customers get better rates, and therefore pay less for insurance.

People are usually put into one category or another because of their driving history.  If you have lots of accidents, you are probably going to have more accidents, so you’re put in Standard.

If you have no accidents or tickets, you’ve got a great chance of being put in preferred.

Credit is the other huge factor in determining where you go.  If you have great credit, you’ve got a good shot at Preferred.  Bad credit?  Nearly no chance.

If you combine the two you see the real power.  A good score and a great driving record gets you into Preferred and gives you the best rates a company will offer.

For your auto policy, this is crucial.  The kind of credit you have can drastically affect how much you pay every month (or every year if you get that sweet paid-in-full discount).

NOTE: Most companies do not call their groups Preferred and Standard.  Each company has its own name for their version of Preferred or Standard, so don’t be surprised if you can’t find that kind of language anywhere on your policy.

What if you don’t have credit because you live off the grid?

It helps you get great homeowner rates.

Just like auto insurance, insurance companies split up their customers into different groups for homeowners insurance, too.  But it’s a little more complicated than just Preferred and Standard.

Most companies have at least two groups for homeowners.  Some have three or four – or seven.  The point is that there are other factors besides just “Average” and “Above Average” that goes into determining where you’re put.

But the same rule applies.  If you have good credit, you’re put in one of the better groups.

Couple this with a great claims history, a house in a safe place that is at least a couple of hundred miles from the ocean, and you’ve got a great chance of getting into the best group possible.

A good score can lead to other benefits in homeowners insurance besides just good rates.  You can also qualify for better policy types as I describe in our Ultimate Guide to Homeowners Insurance.

This can have a big impact on your coverages, providing better base protection and giving you more coverage on things like jewelry, firearms, and electronics.

So the formula is simple. Good Credit = Good Homeowner Group = Good Rates.

You’ll be strutting your stuff knowing how good you really are when you see your quote with that awesome credit score you’ve earned.

I’ve got good credit.  So what do I do about it?

Most people do nothing.  They assume that their insurance is good because, let’s face it, who wants to talk about insurance if they don’t have to?

But if you notice your credit score going up, and you haven’t talked about insurance in a while with someone, you’re missing a huge opportunity.

Having good credit means that companies now WANT you to be their customer.  Just like as I talked about how loyalty is important in my blog and video on Package Policies (also called Bundles), good credit makes you a valuable commodity to insurance companies.

But why?

Well, think about it.  Why do mortgage companies give people with good credit better rates?  Why do banks want to loan you money?  Why do you get 1.5 Million credit card offers a week?

Because people with good credit are reliable.  They pay what they owe.  They aren’t late with payments.  They have a history of financial responsibility.

And, it turns out, they are less likely to have claims.  Insurance companies are math driven.  They’ve done their homework, and they’ve discovered that not only are people with good credit more likely to pay their bills and be on time, they are less likely to get involved in an auto accident or have their house burn down.

Crucially, it also means if they do have an accident, they can be trusted and the money they are given will go straight to fixing the problem.

Put simply, people with good credit are great customers.  Period.

Admit it. This is you checking your credit score right now.

Am I getting the best deal with my credit?

That’s the big question, isn’t it?

When is the last time you go a new quote from your agent?  Or have you talked about your new credit score in your annual insurance review?

To be honest, you probably haven’t.  And you could be leaving money on the table as a result.

If you’ve got good credit, and you haven’t had a new review of your insurance in a while, talk to Alliance.  We can look over your policies and run some numbers that include your awesome credit score, making sure you get the best rates possible.

NOTE: When we check your score, it is a soft hit.  It will not negatively affect your score!

So fill out the very quick form below.  It will take you six seconds.  And you’ve earned it.

An Energy Efficient Rowhouse?  Is that a joke?

I get the skepticism.  My rowhouse?  We are talking about 100 year old homes that often weren’t updated until the last twenty years.  Before that it was Uncle Mike promising he would make something better and now your bathroom lights go out when the kitchen blows a fuse.

But there are ways we can improve the efficiency of our rowhouses (or rowhomes, I will use them interchangeably in all my blogs on the subject).  There are a few sure fire hacks or tricks that can make your home consume less energy, as well as some investments that make your carbon footprint go down – just like your electric and gas bills.

What are they?  Let’s get into it and see how we can save you some green while making you more, well, green.

Slimming black or eco-friendly reclaimed wood?

First: Seal up your rowhouse sanctuary.

The first tip is to eliminate ways for air to get in or out of your home.  While there are plenty of reasons that this is a good idea (water damage, anyone?), it is one of the main ways that your home can become an energy hog.

The reason is pretty simple.  In the summer, hot air can creep in and make your AC work overtime to fight against this constant invader.  And in the winter cold air will seep through and drag temperatures down, making your furnace gobble up gas like there’s no tomorrow.

The primary offenders for these kinds of leaks are windows and doors.  Let’s start with windows.

Windows in rowhouses usually leak because they are either old and not updated, or brand new but poorly installed.

If they are old, chances are the putty that holds the panes has deteriorated with age, letting air slip under or even between the panes of glass.  If you bought your rowhome with all of the original windows and doors, this is a distinct possibility.

It’s also possible that the frame of the window itself is a little warped and that the sliding part of the window is not flush with the exterior pane, making it leaky.

Luckily there are ways to fix it, like in this article.  Make sure that you find the source of the leak and either use a seal or caulk the source of the leak, stopping this drain on your pocketbook.

With doors, the issue is usually with a gap on the top, bottom, or side of the door where cold or hot air can sneak into your rowhouse.  Again, the issue usually starts with an old door or a new, poorly installed one.

Most of the time the answer is as simple as installing a weather strip to stop the gap and prevent outside air from getting in.

Making sure you control the air that comes into and out of your home can help keep your temperature nice and even, making sure you aren’t overworking your AC, HVAC or furnace and saving you money.  A sealed up rowhouse is an energy efficient rowhouse.

And they are the original windows.  How cool is that?

Second: Go with the flow.

Speaking of HVAC systems, those of you with air ducts running through your homes need to make sure that they are clean and allow air to move freely.

Even if you have an old forced air vent (and if you have a rowhouse chances are your home did at some point) you need to make sure they are clear and free.

Dirty, clogged or stopped up air ducts prevent the flow of air and make your system work harder for the same result, wasting electricity or gas and making your energy bill a bottomless pit.

You probably are expecting me to just tell you how to clean your air ducts, right?  Unfortunately, it isn’t that easy.

Just sticking a vacuum cleaner down a vent isn’t going to do the trick.  According to the NADCA, “Failure to clean all components of the system can result in recontamination of the entire system, thus minimizing the benefits of cleaning.”  Yikes.

The absolute first thing to do is MAKE SURE YOU CHANGE YOUR FILTER REGULARLY.  While there are a ton of reasons you should do this, for this blog just know that it is the easiest way to make sure your ducts have a way to get out the dust, pollen, animal hair and human hair that floats around all the time.

So change your filter at least every 90 days.

For the rest look for a duct cleaning company in your nearby area, or just schedule a complete HVAC maintenance by your preferred company.  This is a good idea in general as they can find lots of other ways your system could be burning through more energy than needed.

Which leads me to my next point…

If you think this is cold you should see my rowhouse.

Third: Replace your old HVAC or furnace.

I know you don’t want to hear that.  I didn’t when I had to replace mine just months after I bought my rowhouse.  But the fact of the matter is you may have to if you have an inefficient system.

Tell me this – are you freezing in the winter even though your thermostat is set to 70?  Or are you sweating in August as your system never quite gets to the generous 75 you’ve got it set at?

Then odds are your system is old, or worse, has a leak.

For old furnaces and systems, inefficiency is just part of the game.  According to Green Home Guide, “If your furnace was built before 1992 and has a standing pilot, it probably wastes 35 percent of the fuel it uses, and it is probably near the end of its service life.”

To a 100 year old rowhome, 1992 is like yesterday.  Investing in a new HVAC system may seem like a lot, but if you factor in how much you will save on energy costs over the life of the new unit it could absolutely be worth it.

And if you have a leak, well, that could mean exploratory construction (cutting holes in walls, knocking through floors or ceilings, etc) to find the leak.  And repair could end up costing more than a new unit itself.

You’ll have to figure out if this is a good fit for you.  But chances are, if you have an old, inefficient unit or a leaky one, you already know who you are.  And that’s why you’re reading this.

Fourth: Get a smart thermostat.

Smart everything is all the rage.  Smart phones, smart watches, smart cars.  Why not homes?  Why not rowhouses?

Smart thermostats are the easy way to do that without having your home look like Bill Gates’ humble Xanadu 2.0 (But if you can hook that up, go for it – I MEAN THE POOL HAS UNDERWATER MUSIC).

There are many options out there currently, but I chose the Nest.  The great things about these devices are that they not only change your temperature but they monitor and learn your habits.

No, not in a creepy dude-in-high-school-who-won’t-take-the-hint way, but in a super data-driven practical way.  Smart thermostats adjust the temperature when you aren’t around to conserve energy, saving you money for nothing.

They also have a built in “eco mode,” which is basically like setting your phone on “airplane mode” when you want to save some battery.  It sets it to temperatures that won’t push the system and makes it run as little as possible.

You can also control your temp from your phone, giving you an additional degree of functionality that makes sense in today’s tech-savvy modern world.

Even in your 100 year old rowhouse.

Fifth: Upgrade your appliances.

I know, I know, I’m telling you to spend more money.  But hear me out.

If you’re home has recently been flipped (and I’ll do a blog on the problems with flipped homes soon), you probably have new, energy efficient appliances.  That’s great!  But for everyone else, you may be throwing money down the drain – or into your dishwasher.

Older appliances were made when gas was cheap, coal burning seemed like a great idea, and standards were lower.  In today’s world, they seem like poorly constructed devices that waste natural resources, including your bank account.

Upgrading your refrigerator or your dishwasher or your washer and dryer can save you a tangible amount per month that will add up as the year rolls on.  These machines are smarter in the way they use energy, but also usually do their jobs better and with more conveniences.

So when you’re at the local mega hardware store (or your amazing local store like family-owned Brannock & Hiatt in Mount Airy, NC or an old school, family-owned hardware store like PC Smith & Sons in Saugerties, NY, or a cozy local joint that totally gets rowhouses like Henry’s here in Philly) and you see that sexy new washing machine, tell your partner that you want it because it’s super practical.

And get one with the Energy Star symbol to know for sure it’s energy efficient.

Better made, more efficient, more functional, and better looking.  What’s not to love?

I feel so… efficient.

Let’s wrap it up.

Being energy efficient saves you money, protects the environment, and shuts up your hippy friend Jenny who will at least go back to talking about goat yoga or something.

Doing these things will also put less wear and tear on the appliances and systems in your house, further saving you money down the road.

If you’ve done one or all of the above, stop and give yourself a pat on the back (or better yet have someone do it for you).  Congratulations!  It must feel good to be more responsible with your money.

Another way to save money?  INSURANCE.  (You knew I was going to say that, didn’t you?)

Take two minutes and have a helpful expert at Alliance go over your rowhouse to make sure you’re getting the best and most efficient care you can get from a risk management perspective.

By clicking the link below you can set up an appointment or fill out a quick form to make sure you have the right coverage and the most discounts for your rowhouse.  Shouldn’t you treat your homeowners insurance at least as well as you treat your dishwasher?

So go ahead.  Click.  We’ll be here waiting (but we’ll power down our PCs when you aren’t clicking to save electricity).