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What Influences Your Home Insurance Policy: An Interview with Rachel Morrone of A.L.I. Insurance Agency, Inc.

By Rachel Morrone

Tell us a little bit about your company and its foundation.

I am the owner of a small independent brokerage, ALI Insurance. We strive to provide all lines of insurance to everyone in need of insurance. I have ten years' experience in the insurance sales industry with the last four being in the independent side. I purchased my brokerage two years ago and have since that time doubled our production through adding agents and referral sources.

What are some of the services your company provides?

As a broker we have the ability to shop multiple carriers for the best rate. We can help people who might have had a few claims, been previously cancelled, have bad credit or people with perfect credit and no claims. We can provide commercial insurance and workers compensation insurance that most preferred or captive companies cannot insure.

We try to be as easily accessible to our clients as possible. Our cell phone, email addresses, Facebook page and website are on all of our cards and information that we send to our clients. When I am not in the office I also forward my office calls to my cell phone, allowing customers to be able to reach me in the evenings and on weekends.

Is there a generalized formula that is used to determine home value and thus home insurance? If so, what is this formula in an easy-to-understand way for readers?

Each company has their own home valuation software; the basics are all the same: age of the home, frame vs brick, square footage, # of stories, and foundation type. Most companies require insurance to 100% replacement cost and will provide the client with their replacement estimation at the time they purchase the policy.

Most people don't realize that they do not need to insure the lot their home is on, it is not necessary to include the cost of the lot in the insurance valuation. Companies also take other things as factors in the replacement cost including types of kitchens and bathrooms; we can factor in items like builders grade, custom or designer kitchens and baths.

What are five aspects that affect the cost of home insurance and please explain? (e.g. age of home, credit score, number of structures)

Credit Score
This is a large determining factor on insurance rate and even qualification for companies. Though I have disagreed with this rating factor since I became an agent, actuaries have found through research that people with higher credit scores are less likely to file insurance claims.

Number of Claims
Insurance companies look back 5-7 years for homeowner claims. If you have more than three claims within a 5 year period most insurance companies will cancel the policy forcing a high risk policy with potentially less coverage and higher deductibles.

Multi Policy Discount
Keeping multiple policies such as your auto insurance with the same company can save up to 25% on a home policy. Adding additional policies with the same company such a rental property, vacation homes, and umbrella policies can save you even more.

Location/Age of Home/Fire Dept
Newer homes receive greater discounts as they are less likely to experience major losses. The location of the home matters too, more urban locations will generally have higher rates than rural locations. The distance a home is from a fire department or fire hydrant can cause rates to fluctuate, it is best to be less than five miles from a station and over ten miles from a station will cause an increase in premium.

Replacement Cost Vs. Actual Cash Value
The type of coverage your policy provides be it replacement cost or actual cash value will affect the rate. I try to always encourage clients to take the replacement cost policy even if it slightly more expensive. Replacement cost pays out better in the event of a claim because it pays you to actually replace the damaged or stolen property. Actual cash value or market price is equal to the replacement cost minus any depreciation so you will get much less to repair or replace items in the event of a loss.

Is there any additional information you wish to share on the topic of influences on home insurance policy?

Endorsements are an important aspect of a home policy. They include everything from earthquake, water and sewer backup, mine subsidence, replacement cost on personal property, scheduled jewelry, watercraft liability, etc. It is important to make sure when comparing quotes that the endorsements match up. Always make sure you have replacement cost on both your home and personal property as this is not always automatic.

What is the best way for people to get in contact with you or your company?

We would love to help anyone in the Illinois and Missouri area! You can call us at the office: 618-346-0720, email me: or visit or website at

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