There are a lot of factors that go into determining what your homeowners insurance premiums are, but there are only a few things that will increase those premiums once you’re already locked into a policy for a year or however long your policy is set to last. While claims are the biggest thing that will increase your homeowners insurance premiums, there are a couple other things that will do the same thing. In no particular order, here are things to look out for:
Home Insurance
Increased Home Value
One of the things that you want to do as a homeowner is to be sure that you always have enough insurance, and in order to do this, you need to assess the replacement cost of your home once a year or so. This cost may skyrocket from one year to the next if the cost of materials or labor goes up in your area. Also, if you remodel your home and add in some new luxury materials or fixtures, your replacement costs would go up.
Now, this won’t make the insurance company automatically increase your rates. You’ll actually increase them yourself if you call and ask for your policy limit to be raised so that it reflects the raise in your home’s value. Don’t hesitate to do this, though, as it’s better to pay more for your insurance than to be underinsured in case of a major disaster.
Claims
The most common way for homeowners insurance premiums to be raised by any insurance company is through claims. The more claims you make on your homeowners insurance policy, the higher risk you’ll be, and the more you’ll pay for homeowners insurance premiums. The number of claims that an insurance company considers too many will vary from insurance company to insurance company, and this is something you might ask about before settling on any particular insurance company.
The type of claim you’re making will also go into determining how your rates increase or whether they increase at all. If, for instance, you get into a legal battle because your unleashed and unfenced dog, who had come close to biting someone before, mauls your neighbor or your mailman, your rates will probably skyrocket, or your insurance company might actually drop your policy. This is because an event like this would be mostly or partially your own fault, so your insurance company sees that you’re a big risk and will either make you pay for that extra risk or will not insure you at all.
Other claims that you can’t have prevented, such as a fire that leaps to your house from a neighbor’s home, will probably not make your insurance go up as much. But if your century-old wiring that should have been fixed years ago causes a fire in your home, your rates will probably increase more because the fire was at least partially your own fault.
Home Insurance
If a major disaster happens that levels several hundred homes at once, everyone’s insurance rates will increase. If half your town has to make insurance claims to your locally preferred company, the company will have to increase rates in order to regain capital so that it can pay future claims. Otherwise, it’ll go out of business or be unable to pay the next set of claims that come in.