Understanding Home Insurance Premium Increases

Why your home insurance rates have gone up at renewal.home on top of stack of cash

If you are approaching the renewal period for your homeowners insurance policy, then your agent will send out a report documenting your current coverage and expected premium changes.  If your rates are increasing, you may be confused.  While you should always speak to your insurance provider to ensure that rate increases are not a mistake, there are some legitimate reasons why premiums increase at renewal time.  Here are some of the factors that can lead to higher home insurance rates.

Factors that You Can Control

Leading up to your policy renewal, your home insurance provider will look at any changes that you have made that could increase your risk or lead to increased coverage needs.  These factors can lead to increases in your home insurance rates.

  • If you have recently completed home renovations or updates that increase the value of your property, you may have to increase your home insurance coverage limits accordingly. More coverage means higher premiums, so this could explain why your premiums have increased.
  • Oftentimes, homeowners that have recently filed a claim experience rate increases. This is because policyholders who don’t file claims get coverage discounts.  Once you file a claim, you lose out on this special discount, meaning that you are charged more for your coverage.  Fortunately, you can once again gain access to lower insurance rates if you manage to stay claim-free for an extended period of time.

Factors Outside of Your Control

Sometimes, your insurance premiums go up as a result of things that you simply cannot control.  Some of the major factors affecting homeowners today include the following:

  • In recent years, the number of wildfires, windstorms, hurricanes, tornadoes, and other extreme weather events have increased significantly. As the frequency of these damaging events increases, insurance companies must increase their rates so they can keep up with resulting home insurance claims.
  • When calculating your premiums, your home insurance provider will look at the local crime rate to determine how likely you are to become a victim of theft or vandalism. If your local crime rate has increased over the past year, then your insurer will consider you a higher risk to insure.  As such, they will also increase your premiums.

These are some of the reasons why your home insurance rates may have increased.  Do you have additional questions about your coverage?  If so, then contact the experts at ISU-Wissink Insurance in Culver City, California.  Our dedicated team is eager to assist you with all your homeowners insurance needs today.