Homeowners insurance rates are on the rise in NC. If you have not already experienced a rate hike, you are likely to see one at your next renewal. According to the latest data from the National Association of Insurance Commissioners, the cost of homeowners insurance increased 29 percent between 2005 and 2012, nearly twice the rate of inflation.
Alex Tsetsenekos, vice president and general manager of homeowners insurance for LexisNexis Risk Solutions, says the rate spikes are caused by several factors, including “unanticipated losses from various weather-related events such as tornadoes, wind, hail and flash flooding in areas not previously prone to these losses.” Insurance companies also have seen less investment income due to monetary policy following the recession, Tsetsenekos adds. As a result, they have had a harder time offsetting those unexpected losses.
To avoid higher premiums, we recommend that homeowners meet with their insurance agent annually to review their coverage and explore their eligibility for available discounts. These annual meetings also ensure that your coverage is sufficient and up to date with any upgrades or changes made in the past year.
Here are 10 additional, proven ways to lower your homeowner’s insurance premiums:
Your deductible is the amount of risk that you agree to accept before the insurance company starts paying on a claim. With the cost of homeowner’s insurance escalating, it no longer makes sense to let the insurance company assume all of the risk. If you have a low deductible of $250 or $500, consider raising it to at least $1,000 to $2,500. You could save up to 25% on your annual premium. Think of your homeowner’s insurance policy as risk sharing. How much risk are you willing to assume?
Consider buying your homeowner’s and auto insurance policies from a company that offers both. Some companies offer discounts of 5% to 15% if you buy both types of coverage from them.
Make sure you’re receiving all of the discounts for which you are eligible. For example, discounts exist for smoke detectors, deadbolt locks, monitored security or fire alarm systems, AARP membership, fire extinguishers in the home, etc. If you’re over 55 and retired, you may qualify for an additional 10% discount.
It makes no sense to buy insurance to protect yourself against exposures that you are unlikely to encounter; for example, there is no need for a jewelry floater on your policy if you don’t own expensive jewelry.
Ask your us what you can do to make your home less expensive to insure. Making changes that reduce the risk of damage in windstorms and other natural disasters is one example. Another is updating old wiring or heating systems, which may reduce your fire risk and your annual premium.
Your home is your biggest investment. Make sure it’s adequately protected from risks that you cannot afford to cover yourself. Make sure your policy covers any home improvements that you havve made, major recent purchases, and the increased costs of rebuilding.
Once a year, before your homeowner’s insurance policy is due to renew, dig out the current policy, read through the details, and call us to discuss any changes in your situation that occurred during the year.
Insurers are shying away from certain exposures. For instance, owning certain types of dogs (Rottweilers, Doberman Pinschers, Pit Bulls) can limit or set up your policy for non-renewal. Owning a swimming pool or a trampoline can increase your cost of coverage. Read the fine print in your policy under the “Conditions and Coverages” sections so that you know what is excluded from coverage. You may opt to buy additional coverage to protect yourself from certain known exposures.
Insurance companies are increasingly using credit information to price insurance policies. Don’t have too many open credit accounts, don’t carry balances near the mimit on your credit cards, and pay all your bills on time to keep your credit score healthy.
Our annual stewardship of your personal account will include an automatic marketing process that ensures you will receive the best possible rate through one of our top-rated carriers. Please keep in mind that you may be receiving a longevity discount if you’ve been with your current insurer for several years. Typical discounts are 5% if you’ve been with the company for three to five years, and 10% for six years or more. We represent only A-rated carriers – check out your carrier’s financial health at www.ambest.com or www.standardandpoor.com.
Most importantly, contact our agency to have us review your current policies to ensure that your home and valuable items are properly protected.