If your home insurance premium went up this year, you’re not alone. This industrywide trend has been fueled in large part by inflation and expensive natural disasters.
Reasons for the Increase
The recent increase in home insurance rates is the result of a perfect storm of circumstances—most of which are out of your control. Here are the main factors driving the increase:
Cost to Repair and Rebuild Homes
Inflation has resulted in the rising cost of construction labor, as well as construction materials like lumber, roofing and flooring. Therefore, it costs more to repair and rebuild homes than ever before.
Skilled Labor and Supply Chain Shortages
The COVID-19 pandemic caused a shortage of skilled labor in the construction industry, making it very difficult to get a contractor out to your home. The pandemic also caused extreme supply chain challenges. Both of these issues continue to drive up repair costs today.
More Severe Weather Events
Catastrophic weather events such as hurricanes, droughts, wildfires and flooding have led to record-setting claim payouts and sky-high financial losses. As the frequency and severity of these events increase across the country, so does the cost of insurance. In fact, your premium can be affected even if you haven’t been personally affected by severe weather.
Ways to Lower Your Premium
While you may not be able to control inflation or the weather, there are things you can do to lower your home insurance premium—or at least keep it in check.
Bundle Your Policies
If you haven’t done so already, you should consider bundling your policies with the same insurance carrier. You can get a discount for bundling your homeowners, condo or renters policy with an auto or motorcycle policy. Bundling also works with an umbrella policy.
Take Advantage of Other Discounts
All insurance carriers offer a variety of discounts to help you lower your home insurance policy premium, whether you live in a house, condo or apartment. For example, you can save if you choose paperless billing or if your home is equipped with internet-connected devices that alert you in case of theft, fire or water damage.
Tailor Your Insurance Coverage
It makes sense to only pay for the insurance you need. That’s why you should review your current home insurance policy each year. Remove any coverages that don’t apply to your particular situation and make sure your limits reflect what your property costs to replace.
Update Your Home’s Systems
Installing new systems in your home—or updating existing ones—can lower your premium. This includes your home’s electrical system, heating system, plumbing system and roof.
Increase Your Deductible
Did you know that choosing a higher deductible can lower your premium? Smart homeowners have figured out this makes sense, as the chance you’ll ever file a claim is small. Not surprisingly, more and more people are raising their deductible every year.
Decrease the Likelihood of Experiencing a Loss
Not only will protective devices save you money through home insurance discounts, they’ll also lower your risk of ever needing to file an expensive claim.
- Smoke detectors
- Smart home protection systems
- Water sensors
- Fire alarms
- Interior sprinkler systems