Alyssa Lane
Homeowners insurance is essential for protecting your property, but it can be frustrating when premiums surge. There are several reasons why your insurance costs may have increased, including rising costs of building materials, supply chain issues, unfilled jobs, and extreme weather events. If you've recently filed a claim, your premium may have increased due to the severity of the claim, your personal claims history, or the number of claims in your area. To address this issue, you can shop around for a new provider, bundle your policies, or make home improvements to reduce the risk of loss, such as installing a fire alarm or security system. Additionally, you can contact your state's insurance department to understand the approved companies and rates in your area. If you believe your insurance has been wrongfully cancelled or increased, you can file a complaint with your state's department of insurance.
| Characteristics | Values |
|---|---|
| Home insurance premium increase | Could be due to a claim filed by the homeowner, or by others in the same area. |
| Home insurance premiums can be viewed as a measure of risk. | |
| The severity of the claim impacts the increase. Liability claims tend to change premiums the most. | |
| Insurance companies set their own policies for premium increases within state law parameters. | |
| Extreme weather events and natural disasters can cause insurance companies to increase prices. | |
| The rising cost of building materials and supply chain issues also drive up insurance costs. | |
| Home improvements, such as installing a fire alarm or security system, may make it more likely for an insurer to renew a policy and could lower the cost. | |
| Bundling policies (e.g., home and auto) with the same company can lead to discounts. | |
| Switching insurance companies may result in lower rates for better coverage. | |
| If a homeowner believes their insurance has been wrongfully cancelled, they can file a complaint with their state's department of insurance. |
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What You'll Learn
Shop around for a new insurance provider
If your homeowners insurance has increased, you may want to shop around for a new insurance provider. This can help you find a better deal and keep your costs down.
First, you need to know what companies are operating in your area. Contact your state's insurance department to find out. You can also look up your state's information through the National Association of Insurance Commissioners. If you live in an area where insurance companies have stopped selling policies, you may need to look into a Fair Access to Insurance Requirements (FAIR) plan. These plans offer basic protection from catastrophes and are typically more expensive than a standard policy.
When shopping around, consider bundling your policies. Some companies offer discounts when you purchase multiple policies with them, such as home and auto insurance. You can also ask about premium discounts or credits for long-term customers.
It's important to review your insurance policy carefully before making any changes. Understand the limitations and obligations outlined in the policy, as well as any maintenance requirements that may impact your coverage. Keep in mind that insurance rates may vary based on your location and the risk of natural disasters, such as hurricanes or wildfires.
While shopping for a new insurance provider can help you find a more affordable option, it's also important to consider other factors. These include the level of coverage you need, the company's reputation, and the ease of filing claims. Additionally, making home improvements, such as installing a security system or updating your plumbing, can help reduce the cost of your insurance.
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File a complaint with your state's department of insurance
If you are unable to resolve a dispute with your insurance company or are dissatisfied with how they handled your claim, you can file a complaint with your state's department of insurance. The department will investigate your complaint and take enforcement action if they find that the insurance company, HMO, insurance agent, or adjuster violated state insurance laws.
Before filing a complaint, it is important to first contact your insurance company and attempt to resolve the issue with them directly. State your complaint to a company representative and ask what steps you need to take to submit your dispute, such as writing a formal letter of complaint or providing supporting documentation. Keep detailed records of all communications with the insurance company, including the dates and names of people you speak to, as well as copies of all correspondence.
If you are unable to resolve the issue with the insurance company, you can then proceed to file a complaint with your state's department of insurance. Provide them with your contact information, including your name, address, telephone number, and email address, as well as copies of all relevant documentation, such as invoices, canceled checks, advertising materials, and correspondence with the company.
You can file your complaint through your state's Consumer Complaint Portal, which is typically the quickest and most efficient way to receive a response. Alternatively, you can contact your state's department of insurance directly for guidance on how to file a complaint and the specific requirements in your state.
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Make home improvements to lower costs
If you're facing higher insurance premiums, making home improvements can be a good way to lower your costs. Firstly, you should consider making your home safer to limit the frequency of claims. For example, installing a fire alarm or security system could make it more likely for your insurer to renew your policy and may also lower your costs.
You can also make improvements to your home's internal systems, such as upgrading your plumbing, electrical, or heating systems. This is especially beneficial if you live in an older house in need of serious upgrades, as you'll likely see a substantial rate reduction once these systems are updated. Opting for eco-friendly options, such as solar panels, heat pump water heaters, or Energy Star appliances, can also help you secure discounts.
Another way to lower your insurance costs is to replace your roof, especially if it's older. A newly constructed roof can lower your insurance rates drastically, as it reduces the risk of loss. Similarly, installing wind-resistant windows can help you secure discounts and credits on your insurance rates.
If you're retired, you may be eligible for additional discounts, as you're less likely to be burglarized and may be able to spot fires sooner. Some insurance companies offer discounts of up to 10% for retired individuals aged 55 and above.
Finally, consider bundling your policies. Many insurance companies offer discounts when you purchase multiple policies with them, such as combining home and auto insurance.
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Bundle your insurance policies
If you're facing high homeowners insurance costs, one way to save money is to bundle your insurance policies. This means purchasing multiple insurance policies from the same provider. Many insurers offer discounts to customers who bundle their insurance.
Home and auto insurance is a common combination for bundling, but you can also bundle other types of insurance, such as boat, motorcycle, RV, or life insurance. For example, Progressive offers multi-policy discounts for bundling home and auto insurance, as well as other combinations such as auto/boat or boat/RV. GEICO also offers bundling options and discounts for home, auto, renters, condo, motorcycle, and other types of insurance.
Bundling your insurance policies can not only save you money but also make your policies easier to manage since they're all in one place. It can be a good idea to get a quote to see how much you could save by bundling your insurance policies. Additionally, the best times to bundle insurance are when purchasing a new policy, during renewal, or after significant life changes, like buying a home or car.
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Check your Comprehensive Loss Underwriting Exchange (CLUE) report
If you're facing an unexpected jump in your homeowner's insurance, it is a good idea to check your Comprehensive Loss Underwriting Exchange (CLUE) report. This is a claims-information report generated by LexisNexis, a consumer-reporting agency. It collects and reports up to seven years of personal auto and personal property claims history. This report is used by insurance companies to inform pricing and underwriting decisions.
Your CLUE report will include your personal information, policy number, type and date of loss, claim status, amount paid, and insured property or vehicle information. It is important to check your CLUE report for any inaccurate or unrelated information, as this could be making you pay higher premiums. For example, a roof replaced due to hail damage can adversely affect a rating because it indicates future liability for the insurer. On the other hand, home improvements that reduce the risk of loss, such as a new roof or updated plumbing, could help lower your premium.
You can request one free copy of your CLUE report every 12 months. If you find any errors, you have the legal right to dispute the content with the consumer reporting company and the company that shared the information. They are required to conduct a reasonable investigation of your dispute, free of charge, and correct any errors.
In addition to checking your CLUE report, you can also shop around for insurance policies and look for discounts, such as those offered for bundling multiple policies with the same provider. Making home improvements, such as installing a security system or strengthening your roof, can also help make it more likely for your insurer to renew your policy and may even lower your cost.
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Frequently asked questions
There are several factors that cause homeowners insurance rates to increase, including an increase in natural disasters, inflation, supply chain issues, skilled labor shortages, reinsurance rates, the number of claims in your area, the age of your roof, your credit score, and additions to your property, such as a pool.
Insurers view claims related to theft, water damage, and liability as more likely to be repeated, so they often increase premiums after just one of these claims due to the higher risk. On average, home insurance premiums increase by roughly 7% to 10% after a claim.
If your roof is around 10 to 15 years old, your insurance company may start raising your rates to offset the risk of you filing a claim. The roof, along with the home's systems and foundation, is crucial in keeping the house intact. As the roof ages, the risk of damage increases, especially in areas prone to windstorms or hail.
Insurers use credit information to price homeowners insurance policies. A lower credit score can lead to higher insurance rates, while maintaining a good credit score can help keep your rates competitive.
To lower your homeowners insurance costs, you can install protective devices, such as smoke detectors, fire alarms, water sensors, and smart home protection devices. Additionally, review your coverage to ensure you are not paying for more insurance than you need, and consider increasing your deductible if you can afford to pay more out-of-pocket in the event of a claim. Comparing quotes from multiple companies, taking advantage of available discounts, and bundling your home insurance with other policies, such as car insurance, can also help reduce costs.
