Why is My Homeowner Insurance Premium Increasing?
1.You Had a Claim
If you’ve went several years without a claim on your homeowner insurance, more than likely you’ve been receiving a claim free discount, maybe without even knowing it. Most carriers offer discounts if you’ve been without a claim for 3 years or longer. But if you’ve made a claim recently then that claim free discount would be removed, causing your premium to increase. Most carriers will put that claim free discount back on the policy once you’ve been claim free for a certain amount of time.
2. You Moved Your Auto Policy to Another Carrier
If you’ve had your homeowner insurance and your auto insurance through the same carrier, then you’ve more than likely been receiving a bundle discount on both your home and auto policy. If you find that there is another carrier that offers auto insurance cheaper, and you moved to them that would remove the bundle discount on your homeowner policy thus increasing your premium. Most people think that regardless of what carrier they’re with, if they’re with one independent agent, they believe they’re still getting the bundle discount. Independent agents write through many different companies, thereby offering many different options for savings as well as specialized advice on what carrier would suite your needs best. But that doesn’t mean you continue to get a bundle discount just because you stayed with the same agent. The only way to continue receiving a bundle discount is to have more than one policy with one carrier, not one agent.
3. You Have a Replacement Policy
Replacement homeowner policies are to cover just that, replacement. So as cost of building materials and labor increases, so would the cost to rebuild your home. Having a replacement policy type more than likely means that each year as your policy renews, the coverage amount of your home will increase a little bit. We have many insured’s that we’ve had for 40 years or more. That house they built 40 years ago would cost 10 times that amount to rebuild today. If you’re not on a replacement policy, in the event of a total loss, the amount of money you’d receive most likely wouldn’t cover the cost to buy or build a new home. Increasing the coverage on your home each year is strictly for your protection, but it does increase your premium a little bit each year. Speak with your agent about what policy type you’re on to see if you’re on a replacement policy.
4. The Carrier Experienced an Increase
Something that is out of the control of the insured, as well as the agent, is increases within carriers. Insurance companies fluctuate based on many different factors; factors such as a stint of bad weather, several claims from one area, and overall production. If you’re homeowner policy has increased in price, you can ask your agent if the carrier has experienced an increase.
5. You Have Roof Replacement
When you get a new roof, and inform your agent, your agent more than likely placed roof replacement onto your policy. We always ask insured’s if that is something they’re interested in, but sometimes they forget it’s been discussed. Roof replacement helps keep the value of your roof higher than actual cash value. In our carriers if a roof is 5 years old or newer and it’s in good condition, then our insured’s are approved for the roof replacement endorsement to be added to their policy. Usually this coverage does cost more, but it is more coverage on your roof in the event of a roof claim 10 or 15 years down the road. Ask your agent if roof replacement is something that’s on your policy or could be on your policy, and the impact that coverage could have on your premium.
As always, ask your agent what coverage’s are on your policy, and what could be impacting your premium. Your agent is there to help you and explain things to you.
-Jordan Newcomer
Licensed Property & Casualty Insurance Agent
