Homeowner policies are rated on all of the following, EXCEPT:

• A. Location of the dwelling
• B. Age of the homeowner
• C. Fire protection available
• D. Construction of the dwelling

Answer: (B)

Premiums for homeowners policies are driven by risk to the property and its surroundings, not the demographics of the person who owns it. The factors that matter in rating reflect how likely a loss is and how costly a loss might be.

Location of the dwelling matters because different areas bring different hazards—weather exposure like wind and hurricanes, flood risk, crime, and the overall cost of rebuilding in that area. Fire protection available affects the chance that a fire will cause extensive damage; better protection (fire alarms, sprinklers, nearby fire hydrants, quick fire department response) generally leads to lower expected losses and a lower premium. Construction of the dwelling is important because the building materials and design influence how susceptible the home is to damage from fires, storms, and other perils; for example, masonry construction or a sturdy roof can reduce loss severity and frequency.

Age of the homeowner, however, does not change the probability or cost of a property loss, so it isn’t used in rating. It’s a demographic detail that doesn’t affect the insurer’s risk assessment for property coverage.