When you purchase a home insurance policy, one of the key factors in your decision is the price. Home insurance can be expensive, so you compare quotes and choose the best option for your coverage needs as well as your budget. However, home insurance rates tend to vary even while they are active. You may look at the beginning of the year and find that your insurance rates have jumped by a significant amount. While this isn’t always avoidable, it is important to understand why these changes happen.
Changes in Your Area
There are many factors you cannot control that may still affect your home insurance premiums. Changes in your area can have a negative or positive affect on your home insurance rates. For example, a rise in home insurance claims around you regarding theft, vandalism or natural disasters can cause your rates to rise. If your area has had a bad surge of storms in the past year, you may see a rise in your insurance rates. You may be able to offset some of this risk by improving your home’s weather resistance.
Claims Filed in the Past Year
Rates may also change if you filed a claim on your home insurance policy within the last year. A claim generally raises your risk, as the insurer must pay compensation for an approved claim. This can raise how much you are paying for home insurance.
Upgrades to the Home
Home insurance rates are partially based on the value of the home. If the value of your home increases, so may your need for insurance—and thus your insurance premiums. For example, if you update your entire kitchen with new floors and countertops, you will need additional coverage in case of an accident.
Believe it or not, changes in your lifestyle can also affect your insurance. Did you get married or have a baby? Did you adopt a new pet? Certain changes can have an affect on your insurance. Adding more people to the home can raise your liability coverage as will adding expensive physical items. If you go through any major life changes in a year, it is worth reviewing your home insurance policy to check for any differences.
Be sure to ask your insurance agent about different ways you can save money. Even if your insurance rates go up due to one factor, you may save money in other areas.
Also Read: Understanding Homeowners Insurance Exclusions
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