Why Is My Home Owners Insurance Going Up?

By
Real Estate Agent with (512) 786-8300

The next time you open a letter from the company that provides your homeowners insurance, you might be in for sticker shock. Across the country, state boards of insurance, are authorizing increase in rates in the neighborhood of ten percent, but as high as twenty percent in states like Florida. The rate hikes are due to the insurance companies goal, of having enough funds for paying out claims in the future. Wether it's wildfires in Texas, hurricanes on the east coast, or earthquakes in California, insurance companies have paid out large numbers of claims in the past five years. So what can you do to keep your homeowners insurance at a minimum?

Shop Around

This may seem obvious, but most consumers check with one, perhaps two sources to secure homeowners insurance. Obtain three different quotes, with similar coverage, and you will likely see a difference in costs.

 

Raise Your Deductible

The deductible is the amount of money the homeowner pays towards a loss, when they make a claim. Ask your insurance representative, for a quote with a $500 deductible and a one $1,000 deductible, to compare the difference. 

 

Make Your Home Disaster Proof

While there is no way to make your home completely disaster proof, there are some steps you can take to make it stronger. In hurricane areas, that may be adding storm shutters or windows. In earthquake prone regions, you may want to look in to retrofitting your home to save on premiums. 

 

Use The Same Insurance Company For Auto And Home

Most insurance companies will offer a discount for customers who insure their home and cars together. If you choose to shop around, make sure to ask your insurance company for quotes on every vehicle in you own, and your home.

 

Ask

Ask your insurance company representative how to lower your rate. More specifically, ask how they reward consumers with lower premiums. Good credit scores is an increasing factor in insurance quotes. Security alarms also provide discounts from most insurance providers. Perhaps you are retired or belong to a professional group that entitles you to a discount.

No one wants an increase in insurance, particularly in a tough economy. But use these tips for potential ways to save, so you don't get shocked when that policy comes up for renewal.

Posted by

Scott Hayes

Austin Real Estate Agency

Extraordinary Service, For Extraordinary People

Direct: 512-786-8300

www.austinrealestateagency.com

Comments (16)

Gwynn Carpenter
Gwynn Teal Carpenter-Broker: Home and Hearth Realty (Austin) - Austin, TX
: Broker, Home & Hearth Realty (512)467-6191

Scott:  You've written an excellent post about insurance....most folks don't understand that you can search for new insurance even if your current policy isn't about to renew!

Oct 10, 2011 12:37 PM
Melissa Ostrom & Melville Capps Newton MA - The Mel and Mel Team
(617) 388-3151 | Century 21 Commonwealth - Newton, MA

Melville Capps"Good credit scores is an increasing factor in insurance quotes." Horsefeathers!


Show me a causation between credit scores and actuarial tables. Do houses of people with a certain credit score catch fire more often than other homes ? How about falling trees ? It is just a way to increase rates by creating an artificial classification without a nexus to risk and liability. Don't get me started ...


Melville Capps

Oct 10, 2011 12:54 PM
Scott Hayes
(512) 786-8300 - Austin, TX
Realty Austin, Broker Associate

Gwynn- I think people would be surprised how much they can save by shopping around . My rates went up with my current company, so I just switched last month.

 

Melville- You may very well be right about actuarial tables, and rate hikes. But credit scoring is becoming a bigger factor in insurance quoting for home and auto.

Oct 10, 2011 01:10 PM
Thom Abbott
MyMidtownMojo.com |770.713.1505 | Intown Atlanta GA Condo Living - Atlanta, GA
Midtown Atlanta GA Condos For Sale

Scott:

 

Great information regarding insurance. It's also important, if you own investment property, that your tenants have their OWN insurance to cover their belongings as well as for any damage. My State Farm representative said that if you have a claim on your OWN policy within 3 years, and you go to get a new policy (say that new home you bought) they very well may not write you a new policy.! Holy Crap!

Insurance, be it car, home or health...always a challenge.

Oct 10, 2011 01:21 PM
Kristine Ginsberg
Elite Staging and Redesign, LLC - Short Hills, NJ
NJ Home Stager

Scott - all really sound advice on shopping around for Home Owners Insurance. And to your point, most people just don't do this or look at maybe two and decide between them.

We don't live in a flood zone and never have had an issue.......until Irene came along and so many homes and shops were flooded with 2 feet of water - none of the owners had flood insurance. You just never know and better to be safe than sorry! SUGGESTED!

I'm sure these people 2 towns over from where I live wish they had flood insurance!

Oct 10, 2011 01:21 PM
Ginny Gorman
RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate - North Kingstown, RI
Homes for Sale in Southern RI and beyond

Scott, it is about the credit scores and making sure you are adequately covered...just because the last owner didn't need flood insurance doesn't mean you DON'T...I always am checking the FEMA flood maps especially when i have cash buyers ...do they mind spending $6000/year + on flood insurance...it is their call and our duty to share...thanks

Oct 10, 2011 01:27 PM
Brenda Mullen
RE/MAX Access - Schertz, TX
Your San Antonio TX Real Estate Agent!!

This is some excellent information Scott.  In fact, now I am going to have to go and check if my insurance went up..

Oct 10, 2011 01:36 PM
Jill Sackler
Charles Rutenberg Realty Inc. 516-575-7500 - Long Beach, NY
LI South Shore Real Estate - Broker Associate

A post with good, commonsense advice on how to keep costs down. Bundling different insurances with one company works great.

Oct 10, 2011 01:51 PM
Cathy Criado
Criado Realty - San Antonio, TX
Making Real Estate Profitable

Scott, This is a topic I haven't seen blogged. Good for you. You should be able to help a few home owners save a few dollars.

Oct 10, 2011 03:46 PM
Lori Churchill Cofer
Beasley Realty - Pullman, WA
Realtor - 509-330-0086 - Pullman, WA

Scott,

One thing that homeowners need to do is advise their agents when they put on a new roof.  It can lower your rate.  Also, the installation of security devices do as well...

Oct 10, 2011 05:36 PM
Doug Rogers
Bayou Properties - Alexandria, LA
Your Alexandria Louisiana Agent

Even as home values decline insurance rates go up. A little different than the economics we studied in college...

Oct 11, 2011 03:05 AM
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

Scott, beisdes shopping around, people need to always ask their current insurer if there's anything they can do to save money. Multi car discounts and higher deductables are the first place to start.

Oct 11, 2011 12:02 PM
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

Scott, lots of great comments - and I would add to be sure to get replacement value for the possessions in the house. It doesn't cost that much more and makes a world of difference if there is ever a claim. Also, flood insurance in non-flood zone areas does NOT cover possessions, just the structure, UNLESS you get coverage for that as well.

Sharon

Oct 11, 2011 02:16 PM
Teral McDowell
Referral Patners LLC - Murphy, TX

Good advice, Scott, and I plan to do a little shopping around too.

Oct 11, 2011 05:45 PM
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Scott, I recently upped my deductable from $500 to $1000 and increased to amount my home is insured for.  It's costing me less than when I had a lower deductable.  It made sense because I was always reluctant to report of claim of under $1000 anyway.  I think that, like a lot of homeowners, I'm concerned about being cancelled - not to mention what buyers' insurance companies are likely to find on the CLUE report when I go to sell.

Oct 12, 2011 02:39 AM
John Cannata
214-728-0449 http://TexasLoanGuy.com - Frisco, TX
Texas Home Mortgage - Purchase or Refinance

I've gotten into a habit of checking in with past clients about their insurance coverage. Recently I found an old client that was paying 4% deductible and over $2100 a year. Got them in touch with the insurance agent I work with... client now has 1% deductible and under $1000 a year. This is with slight BETTER coverage than what they had previously. So important to not just 'accept' the bill from your insurance company but to actually question it.

Oct 12, 2011 03:47 AM