If you are coming to the end of your home insurance policy term, you may find that your rates are going up. While it is not uncommon for home insurance rates to increase, you may wonder why you must pay more. Many factors can impact your home insurance rates. Understanding the reasons home insurance rates increase can help you find solutions to lower your rates.
Keep reading to learn some of the most common reasons why home insurance rates increase.
Average Premium Increases
Increases in insurance rates are typical year over year. On average, premiums increase across the country regardless of location, weather, upgrades, and more. Since 2009, homeowners’ insurance rates have increased by about 50%. While you can find discounts or less expensive rates, you can typically expect a slight increase in insurance rates.
Increased Construction Costs
One unavoidable reason for home insurance rate increases is the increased cost of construction. Your insurance rates are partially based on the cost to rebuild your home, also known as dwelling coverage. The construction price directly impacts the cost of rebuilding your home, including local materials and labor. As construction costs go up, so do home insurance rates.
Needed Upgrades or Repairs
If your home needs upgrades or repairs, your insurance premiums may increase. Insurers often conduct home inspections, even if you have not filed a claim. Exterior and interior inspections may identify necessary upgrades, including your home’s structure. Your insurance rates will likely increase if you do not make the recommended repairs or upgrades within a specific timeframe.
Some additions to your home are considered a safety hazard by insurance companies. Adding a pool, trampoline, or swing set can all contribute to increased home insurance rates. Your coverage will have to rise to take care of the additional safety concerns.
Natural Disasters or Weather
Your insurance rates may increase if you live in an area that recently experienced a natural disaster or weather event. You may notice an increase in your home insurance rates after a natural disaster, even if it did not directly impact you.
Decrease in Credit Score
If your insurance score has decreased, you can expect an increase in your home insurance rates. Your credit score, various risk factors, the safety of your home, and your claim history are all factors in your insurance score. Decreases in your credit score can directly impact your insurance score and lead to higher home insurance premiums.
Filing Multiple Claims
While home insurance covers the cost of repairs or damage to your home, filing too many claims can negatively impact your home insurance costs. If you file an insurance claim for all minor losses or covered repairs, your insurance rates may increase. You can even experience higher insurance rates if your neighbors file a lot of claims. Insurance companies pay attention to your surrounding neighbors, including burglaries, weather events, and more.
Find Affordable Home Insurance
If you are searching for affordable home insurance, Bolt Agency offers a variety of policies to meet your needs. Start your home insurance quote today!