Why Do My Home Insurance Rates Rise Every Year?

09 Nov Why Do My Home Insurance Rates Rise Every Year?

Home insurance is crucial to cover your home’s structure and personal properties from the unexpected. However, its price won’t stay the same, as it can increase every year depending on your ever-changing risk factors and requirements and how you have used your policy.

Here are some reasons why home insurance rates increase:

• You Filed a Claim

  Even filing one claim (whether small or big) can impact your home insurance rates. Also, non-catastrophic claims (theft, liability, water damage, etc.) increase your rates more than claims resulting from natural calamities.

• Inflation

  Inflation has increased the cost of construction. So, adjusting your coverage limits to cover your home rebuilding costs will increase your premiums.

• Home Additions

  Home improvements like upgrading your flooring and furniture can increase your premium, as repairing or replacing them after a covered loss can be expensive.

• Other Policyholders Are Filing More Claims

  If other local policyholders file more claims, your rates will increase along with theirs, whether or not you file a claim. You can expect this to happen especially during a major natural calamity. For example, if an insurance provider paid more claims from a particular area for the same peril, they will likely increase the coverage rates of the policyholders in that community.

• Risk Elements on Your Property

  Adding features like a swimming pool, hot tub, swing, slide, or trampoline will raise your home insurance rates, as they increase the probability of others getting injured on your property, raising your chances of filing more liability claims.

• Outdated Systems/Appliances

  Having outdated HVAC, plumbing, or electrical systems might raise your insurance costs, as these systems are vulnerable to repairs and fire hazards.

• You Have a Dog

  Though dog bite claims are covered under liability coverage, certain breeds (like German shepherds) attract higher home insurance rates.

• Older Roof

  An older roof is more susceptible to leaks and cannot withstand storm and hurricane damage, so you may have to pay higher insurance premiums. It is good to replace your roof if its shingles are 15-20 years older, the tiles are 40 years older, or the roof is already damaged.

• Your Provider Covers Several Homes in Your Community

  If an insurance provider insures many homes in the same area, they may increase the insurance rates to meet all the customers’ claim obligations when the disaster strikes and damages all of their homes simultaneously.

• Poor Credit Score

  Many insurance providers consider credit scores while calculating premiums. If you have a poor credit score, your home insurance rates will increase. However, you can improve your credit score by making payments on time and lowering your credit-ratio utilization.

  Though insurance costs rise every year or whenever your policy is up for renewal, you can keep it relatively low by updating your home systems, maintaining a good credit score, and installing safety features to decrease claims related to theft and vandalism.

Insure Your Home with KSD Insurance

If you are looking for an all-inclusive home insurance policy that covers your home and belongings at all times against every risk, contact Kevin or Merci here at Kevin S. Dougherty Insurance. We will help you find the right policy according to your budget and needs.