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Beware of 6 factors that can hike your home and auto insurance premiums

Here are six reasons your home or car insurance may be higher than you'd like.

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You don't have to be an expert on risk analysis to have a pretty good idea of how insurance pricing works. Before you buy a policy, actuaries determine the statistical likelihood that you'll use your coverage. The greater risk your pose to the insurance company having to pay out, the higher you'll pay in premiums. Some of these risks are obvious. You'll pay more for your car insurance if you get into frequent accidents. You'll pay greater health insurance premiums if you smoke. And yes, your life insurance policy will be more expensive if you spend your weekends BASE jumping and shark diving.

But other stats that actuaries consider may not be so clear. Read on for six aspects of your personal risk profile that may hike your insurance premiums. Note: No two insurers are the same; if you find yourself wondering whether you're paying extra for some of these factors, talk to your insurance agent and consider shopping around for a cheaper policy.

Where you live

Your homeowners premiums increase with the likelihood that your home may be at risk from a natural disaster such as a wildfire or a hurricane, says Loretta Worters of the Insurance Information Institute. "If you live in a disaster-prone part of the country, taking steps to mitigate those risks can help you save on premiums," she says.

Depending on where you live, you could end up paying higher premiums for auto coverage, too. Insuring your vehicle is more expensive in urban areas, where more cars are on the road, says Derek Ross, president of Kulchin Ross Insurance Services. "Odds of an accident or your car being stolen or vandalized increase in an area where the population is larger," he says.

You'll pay higher auto premiums if your neighbors are more likely to file lawsuits. According to the American Tort Reform Association, residents of particularly litigious areas, such as Philadelphia, California, and New York City (deemed "judicial hellholes" by ATRA) are likely to be charged higher insurance premiums as a result.

Where you park

You may live in a quiet suburb, but if you keep your car parked in a higher-risk area, you'll see a bump in premiums, says Fabio Faschi, property and casualty operations manager at Policygenius. "That can make a big difference if you have a car in New York or California," he says.

Parking your car on the street rather than in a secure garage will bump your rates, too, according to the Insurance Information Institute, but you can mitigate some of the costs if your car has anti-theft features such as an alarm.

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Your home's past

Even if you didn't live there at the time, past insurance claims made at a home can affect what an insurer will charge for a homeowners policy. If you're in the market for a new place, "it's important you determine whether or not there have been any claims prior to buying," says Ross. "One of the most painful claims is for water damage. Insurance companies are hesitant to insure homes that have past water claims."

Find out a home's claim history by requesting a copy of the home seller's Comprehensive Loss Underwriting Exchange (CLUE) report, which details any insurance claims made over the past 5 to 7 years. If you're looking for information on the home where you currently reside, you can request your own CLUE report (only a property's owner may access the report) once a year from LexisNexis.

Your claims record

The more claims you've filed in the past, the more insurers will charge you. Filing claims for fire, liability, or theft are likely to hike your homeowners premiums by about 20%, according to data from Insurance.com.

But you may be surprised to learn that it can pay not to file a claim in the case of an accident. An auto insurance claim will boost your premiums and will typically stay on your record for about three years, says Ross. It's worth it, he says, to consider the potential costs of filing a claim if you get into a minor accident. "If you have a $1,000 deductible and the damage to your vehicle is $1,300 to $1,500, it may not make sense to file a claim," he says. "Keeping your record clean and trying to minimize claims overall will help mitigate your insurance costs."

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Your credit history

Your credit score doesn't factor directly into the cost of your premiums, but your credit history is used to calculate what's called a credit-based insurance score, which factors into the price of both homeowners and auto premiums. Fair Isaac Corporation (FICO) estimates that about 95% of auto insurers and 85% of home insurers employ credit-based scoring where legal, charging higher premiums to those with poorer scores.

Your history of paying off debt and how much outstanding debt you currently have are the largest factors in the scoring, followed by the length of your credit history, whether you've applied for new lines of credit, and the mix of credit you have.

What's in your backyard

Your home insurance doesn't just cover your house and stuff. You're also covered for liability should someone suffer an injury on your property. That means all that potentially dangerous (read: fun) stuff in your backyard may up the price tag on your insurance.

"Trampolines and diving boards will both have an impact on your premiums," says Faschi. "Some companies won't even take the risk. Others will say 'we'll insure you, but you have to get rid of the trampoline.' Or liability coverage might be limited or excluded."

And that new puppy running around with the kids in the yard? Depending on the breed, he might raise your premiums too. "Your insurance doesn't just cover the property. If the dog bites someone, you're liable," says Faschi. "You could have the best dog in the world, but if the breed has a bad history statistically, that's when the insurance company is going to step in."

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