The Insurance Information Institute found the typical homeowners insurance policy
jumped up 10% in 2022, and is expected to continue to significantly rise through 2024.
Premium increases are based on the rise in cost of supplies and labor to repair or rebuild, the increasing number natural disasters and number of claims the company has to pay. Do not be tempted to drop the coverage and risk a financial hit if you have a misfortune. No one wants to consider the possibility their home having a fire, damage from flooding or the theft of valuables, but people who do and have the insurance to cover their replacement are so thankful to be adequately covered, especially if they need temporary housing paid for.
It used to be prudent to shop around to find a lower price that is offered to attract new
business, but nowadays changing companies may not be in your best interest. Because
of inflation and the increasing cost of doing business, some carriers are putting a freeze
on writing new policies, putting a longer time period before one can make a claim, while
others are leaving markets (states). And note: many insurance companies have decided
to NOT reinstate a lapsed policy, no matter the reason, so don’t be late in paying!
Here are some tips on what to consider to make sure you are getting the coverage you
want at the best rates:
• The coverage amount should not be equivalent to the selling price of your home. It is
just for replacing the buildings and contents. You do not need to include the price of
the land on your property. A reputable agent should be able to estimate what it
would cost to replace.
• Consider a higher deductible. Going from $500 to $1000 can reduce a premium by a
double-digit percentage.
• Consider bundling with your auto insurance to get a better rate on both.
• Certain home improvements can lower the cost as well, such as a water leak
detection, home security system, updated plumbing and electrical in an older home,
gas leak detection are some. Ask your agent for a discount review.
• Carefully consider including “loss of use” benefit. If your home is uninhabitable, you
want coverage to pay for a rental while you are waiting for it to be restored. If a lot of homes are damaged at once, it can take a while for your home to be repaired or rebuilt.
• Consider if you want a rider to pay for damage from a sewer backup which can be
caused by tree roots or a municipal failure. It is generally more comprehensive and
costs less than what the city offers.
• Homeowners policies will cover damage from flooding within the home, not those
originating outside the home which would be covered by a separate flood insurance
policy. Know that one in three claims for flood damage were from homeowners with
low to moderate risk of flooding.
There are other riders that you may want to include to replace your customized interior
design elements, or your antiques, painting, jewelry at cost, rather than depreciated
value. (Make a video inventory and keep in a safe no on site place). Bottom line, you do
not want to be over insured, or under insured.
Protect your beautiful home!
The one who gets wisdom loves life; the one who cherishes understanding will soon prosper.
Proverbs 19:8
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