Why do home insurance rates go up

When home insurance rates go up, it can be for multiple reasons. The good news is, there are always ways to get the premium down as well. In this article we’ll go over a few of the basics you should look out for to keep your home insurance rates affordable. 

Some of the basics characteristics that determine rates have to do with the location of the home. The age of your home will play a factor, as well as your insurance score. Having an alarm system and a well maintained home can help to improve your home insurance companies view of how insurable you are. Having everything working well while the inspector takes a look at the home can always help. 

There are other situations that will be out of your control. If a catastrophic event creates a historic amount of claims, the home insurance company may be forced to raise rates. 

If your home insurance rate went up, or the renewal on the policy is somehow higher, you’re probably wondering why. Especially if you’ve never had a claim and always maintained your insurance payments. Hopefully we can help you to answer those questions below.

The home is ready for upgrades

As your home begins to age certain things within the home will deteriorate as time goes on. With that said some home insurance companies may do an inspection when your renewal comes around. If there are upgrades needed you may be asked to pay a higher premium. 

The inspect will at a minimum check the exterior of the home. They will check the foundation, roof, all the exterior walls and anything else they may think to take note of. If the outside of the home is in bad shape there’s a good chance you’ll run into an increase in your home insurance rates. 

The cost of construction is high

The cost of construction can change due to availability, taxes and shipping to name a few. The area you live in will also create a difference in cost. The home insurance rate you receive will be determined by coverage limits and if the cost of construction is higher than when you first purchased the home, you will need to increase coverage limits to cover the difference. Otherwise you can expect to pay out of pocket for whatever increases you incur. 

One of the key indicators of the homes rebuild cost is the cost of local construction materials & labor. As mentioned above construction costs can increase for a variety of reasons. Most of these increases will be out of your control. The best thing you can do is just make sure you’re covered for the adequate amount of homeowners insurance. 

Your personal home insurance score went down

Each one of us has an insurance score and it’s determined by a variety of factors. A lot has to do with risk. If you appear to be more of a risk, you can expect higher rates. Claim history and safety features will play a role in this. Your personal home insurance score will be a determining factor on what your rates will be. High home insurance premiums are the result of a low insurance score. 

Most home insurance companies will issue a home insurance score during the application process. The you come up for renewal is typically when they update this score. Keeping claims to a minimum or avoiding them if possible will help to maintain a healthy insurance score and in turn get you lower home insurance rates. 

Your home insurance company is forced to increase rates

We touched on this earlier. If for some reason a black swan event happens that creates historic amount of insurance claims, the insurance company may need to increase home insurance rates just to stay afloat. 

Market conditions are something that aren’t within our control so the best you can do is shop around and make sure you’re getting the best policy for your money. This is where the agents at Eugene C Yates Insurance Agency can help! All the agents have extensive knowledge when it comes to homeowners insurance and a firm grasp on the home insurance companies available. Best of all they have access to some of the best homeowners insurance companies in the industry! They make buying home insurance easy and affordable. Give us a call today, we’re nice people & we have great rates! 916 313 6100