Why Home Insurance Costs Are Going Up
Home insurance helps provide crucial financial security and peace of mind during unexpected events like a house fire or windstorm. Recently, insurance rates have increased alongside prices for many other goods and services. As homeowners nationwide face increased home insurance costs, they may be tempted to skimp on coverage to help offset rising costs. Before risking potential exposures to your property, consider why prices have gone up and how you may be able to control overall costs without limiting your coverage.
While there are many reasons behind these widespread increases, below are a few main drivers homeowners should know. Your agent can help explain the pricing of your homeowners insurance rates in more specific terms.
Rising Property Values
One of the main reasons for higher home insurance premiums is the increase in property values. As property values go up, insurers must adjust premiums to cover the higher cost of rebuilding or repairing homes in case of damage.
Expensive Materials and Construction
Another factor contributing to higher premiums is the rising cost of materials and construction. Lumber, materials and labor have become more expensive in recent years. Supply chain disruptions, increased demand and trade restrictions contributed to shortages and price increases. Insurers consider these higher costs when setting premiums.
Changes in Climate and Natural Disasters
Natural disasters like hurricanes, wildfires and floods have become more frequent and severe. Insurance claims due to these extreme weather events have increased, causing insurers to reassess risks and adjust premiums. Increased chances of property damage from natural disasters contribute to overall home insurance cost increases.
How to Lower Your Home Insurance Costs
While higher premiums may pose challenges for homeowners, it‘s important to understand that insurance providers must accurately assess and price the risks associated with homeownership.
To potentially lower home insurance rates, homeowners can consider taking the following steps:
- Increase home security by installing alarm systems, deadbolts and smoke detectors, as this can reduce the risk of theft and fire damage.
- Bundle home and auto insurance with the same provider, as many insurance companies offer discounts for multiple policies.
- Raise the policy’s deductible amount, which can lead to lower premiums but requires homeowners to pay a higher out-of-pocket amount in case of a claim.
Homeowners should review their policies regularly to determine if coverage changes are needed and seek professional guidance to find the most suitable and cost-effective coverage for their needs. Speak with your licensed agent to compare quotes from different insurers and find the right policy for your home.
Contact Action Insurance Company in Lake Oswego, Oregon, to learn more about controlling your home insurance costs and get a personalized quote for this essential coverage.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.