Why Did My Home Insurance Premium Go Up!
One of the most common questions asked by customers is "Why did my home insurance premium go up?" The increase is especially annoying or shocking to the homeowner if they never put any claims in. We have to agree.
However, the honest truth is, premiums always go up. It is common to see an annual increase in your home insurance premium. Many of the factors why are totally out of the customers or agents control.
Let's explore some of the reason's why.
Coverage A Inflation Adjustments
A main coverage on your home insurance policy is the Dwelling A Coverage. The amount of this coverage is for the amount it would cost to rebuild your property if there was a total loss, such as a fire. This is the replacement cost, not to be confused with the Market Value.
When you first purchased your home insurance policy, many carriers will do an inspection or use a replacement cost estimator tool to help come up with the replacement cost of your property.
In order to keep pace with rising construction, rebuilding, labor, and material costs, and to ensure that policyholders' homes are adequately insured, most carriers are revising its Coverage A inflation factor on renewal policies from 2% to as much as 7.5% or more.
Rising Natural Disasters or High Rate of Claims in Your Area
The area your home is located could have a large impact on your premium. If your area is susceptible to certain weather conditions, such as wind or hail or wildfires; then there is a good chance your property could be damaged as well.
The Age of Your Home
Newer homes rate better, which results in a lower premium. As your home gets older, so does the age of the roof, plumbing, electric and heating. An old roof is more likely to result in a claim from wind or water damage. An old electrical system is more likely to cause a fire. An old heating system is more likely to cause water damage. As a result, an home insurance carrier has to factor into the premium the added risk of an older home.
There are discounts available if you do update your roof, heating, electric and plumbing. You should notify your agent if any of those repairs have been made after the inception of your home insurance policy.
The Insurance Company Increased The Rates to Remain Profitable
Believe it or not, insurance companies are companies set out to make a profit. State laws require insurers to file and justify any proposed insurance rate changes for their products, i.e, home insurance. From the State of New Jersey Department of Banking & Insurance website, "The rate and rule review process ensures that companies charge rates which are adequate to pay claims while not being excessive ."
What To Do If Your Home Insurance Rates Go Up
You can try the following helpful solutions:
Bundle your home insurance with your auto insurance, you could save up to 10%
Get a Central Station Burglar and Central Station Fire Alarm Installed
Update Your Roof and Heating System
Use a broker and compare prices with under carriers.
Let us work on your behalf to compare your rates & coverage with the best insurance companies available. We'll instantly connect online with your current insurance provider and get everything we need.
"Disclaimer: The content contained in this blog is for informational purposes only. It should not be considered insurance advice since every client's needs and circumstances are different.. Bergen Insurance Group, LLC makes no representation as to accuracy, completeness, currentness, suitability, or validity of any information on this site and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All statements represent the sole opinion of the author and is provided on an as-is basis. For an actual description of all coverages, terms and conditions, refer to your insurance policy.”
