Insurance Tips

Why Did My Home Insurance Increase?

Increasingly severe weather trends have contributed to rate increases in home insurance across the country. As weather events increase and insurers pay out more for catastrophic claims, insurance carriers file rate increases to compensate for those losses.

1. Weather Trends

The entire country has seen an increase in severe weather events over the last few years. In 2016, 7 hurricanes hit the United States reaching 111+ MPH wind speeds, including Hurricane Matthew, which caused more than $5 billion in damages. In 2017, 10 hurricanes occurred, including Harvey and Irma. We also saw fires that raged through California causing billions of dollars of damage. Last year, the hurricanes and catastrophic fires continued, along with freezing and hail claims across the Midwest. As weather events are more severe and more frequent, claims increase and the need for a higher overall rate for home insurance also increases.

2. Increasing Construction Costs

Home insurance rates are largely determined by your home’s cost to rebuild. Your home’s cost to rebuild is different than the market value of your home. For that reason, the cost of construction materials and labor in your area can impact your dwelling value and, consequently, your insurance premium. Construction costs can rise due to increased demand after a large catastrophe, short supply, or even tariff increases.

3. Claim History

Your personal claim history can have an impact on your insurance premium. If you filed one or more home insurance claims over the last 5 years, it can impact your premium. Consequently, if the area where you live in is regularly impacted by storms or burglaries, your home insurance premiums may be impacted, too, even if you have a clean claims history.

What can I do to improve my home insurance rates?

1. Review with Your Trusted Insurance Advisor

It is important to review your home insurance coverage with your trusted insurance advisor. An advisor can help ensure that you are not skimping on important coverages. Don’t risk a lot in the future, for a small savings now.

2. Review Your Deductibles

Your homeowner’s insurance deductible is the quickest way to help reduce your insurance premium. The higher your deductible is, the lower your insurance premium is. Most insurance carriers provide a standard minimum deductible of $1,000, but that amount can be increased. It is important to weigh the overall savings with what you are comfortable paying out of pocket in the event of a loss, too.

3. Review Your Home Updates & Available Alarm Credits

Has your roof been updated within the last 15 years? Have you upgraded your wiring, plumbing, or heating? Have you considered installing a water shut-off device or recently installed a central burglar alarm? If so, you may qualify for more preferred rates.

If you would like to review your home coverage with a trusted advisor, please contact an Account Manager at Evarts Tremaine.

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