Homeowners insurance is one of those products that consumers are often reluctant to switch providers. After all, if they’re unhappy with their current provider, they might not want to switch to a new one. But is this really true? In a word, yes. Many homeowners insurance providers will allow policyholders to increase their rates as much as they want without any notification or warning. This is something to keep in mind the next time you’re shopping for homeowners insurance—make sure you understand what your policy does and does not cover before signing on the dotted line.
How Much Do Homeowners Insurance Rates Go Up?
Homeowners insurance rates can go up as much as the homeowners insurer wants. Homeowners insurance is an important part of protecting your home and possessions from potential damage or loss. Rates for homeowners insurance can vary depending on a number of factors, including your location, type of home, and how much coverage you need.
Some homeowners insurers may increase rates annually by a percentage or multiple of the rate increases that banks offer on loan products. This means that even if you have good credit and don’t use your home as a cash cow, your rate could still go up if the insurer thinks there’s greater risk associated with your property. Other factors that can affect homeowner insurance rates include: whether you have any claims filed against you in recent years; the age and size of your home; and whether you have any outstanding mortgages on your home.
Why Does My Homeowners Insurance Rate Go Up?
If you’ve been paying your homeowners insurance premiums on time each month, it’s likely that your rate has gone unchanged for the past few years. But if you haven’t been keeping up with your premium payments, chances are your rates could have increased a bit recently.
The big factor that affects your homeowners insurance rates is the National Flood Hazard Insurance Program (NFHIP). NFHIP requires all insurers who sell policies in areas affected by certain levels of flooding to set their rates accordingly. For 2018, NFHIP raised the minimum mapping requirement from 50% to 100%. This essentially means that any property within 250 feet of a federally-designated “high-risk” floodplain will be required to purchase flood insurance through NFHIP.
Property values in high-risk areas tend to increase more rapidly than those in less-floodprone areas, which can lead to annual premium hikes for homeowners who don’t have adequate coverage. If you’re concerned about your home’s susceptibility to flooding and would like to investigate whether supplemental coverage through NFHIP is necessary, consult with an insurance agent or review your policy details online.
What Can I Do to Reduce the Amount My Homeowners Insurance Rates Go Up?
There are certain things that homeowners can do to try and lessen the possibility of their home insurance rates going up as much as they want. For example, if your home is in a high-risk area, you may want to consider lowering your deductible. This will make it easier for the insurer to cover any damages that occur. Additionally, be sure to keep up with your home’s maintenance, including checking for leaks and repairing them as necessary. Finally, document any damage that happens in case you need to file a claim later on.
Conclusion
Homeowners insurance can cost as much as the home owner wants it to, but fortunately for most people, there are ways to limit what your premiums will be. By taking some simple steps before you buy or sell a home, you can reduce the amount of coverage you need and still maintain basic safety protections. If you have any questions about homeowners insurance or want to get a free consultation from one of our experts, don’t hesitate to reach out. We would be happy to help!
