If the cost of your home insurance recently went up, several factors likely went into determining your new premium. While some price increases may be due to factors within your control, others are caused by issues that are affecting home insurance customers across the country. We’ve got the lowdown on some common reasons for price increases and some things you can do to save.
Home insurance premium cost factors you can control
When your insurance company is trying to determine the price of your home insurance policy, they consider many different factors. Here are a couple of factors within your control that may contribute to an increase in your home insurance premium:
- You’ve made updates or renovations that have increased the value of your home. Did you recently finish your basement or install another bathroom? If the value of your home increases, you may need to purchase more coverage than you had before, which could mean you’ll pay more for home insurance. But while some home upgrades may lead to a premium increase, others may actually help you save or qualify you for a discount.
- You’ve recently made a home insurance claim. There are a few reasons why your premium could increase after making a home insurance claim. First of all, many insurers reward customers with lower premiums when they’ve remained claims-free for a set period of time — if you’ve been benefitting from this type of savings and you make a claim, your claims-free streak will start over again. Secondly, after you’ve made several claims in a specific period of time set out by your insurer, you may have a surcharge added to your premium to offset the cost of processing multiple claims. Learn more about how making a claim may affect your home insurance premium.
Home insurance premium cost factors affecting the entire industry
When your home insurance premium goes up even though nothing about your situation seems to have changed, you may find yourself wondering why. We’re here to explain what’s happening behind the scenes that’s contributing to industry-wide price increases across the country. Here are a few of the major contributors:
- Extreme weather events and catastrophes are occurring more frequently across the country. As more and more wildfires, windstorms, hurricanes, tornadoes, and other damaging events occur, insurance companies are spending more to clean up the damage and get their customers back on their feet. As the frequency of severe weather events increases, insurance companies have to increase their rates so they can afford to pay the claims that occur as a result.
- Trends in your area show that you’re now at higher risk for burglary or other incidents. Insurance companies use advanced analytics to predict the likelihood that you will make a home insurance claim — and as your likelihood of making a claim increases, so will the cost of your insurance. The cost of your home insurance may go up if your insurance company predicts that homes in your area have become more prone to burglaries or damage from extreme weather events, for example.
- Supply chain disruptions and labour shortages are leading to increased repair costs. It’s harder to source materials and labour to complete repairs after a damage-related claim. As a result, repair prices are on the rise, contributing to higher home insurance premiums.
- Inflation is leading to increases in the costs of emergency cleanup services, skilled trades, personal belongings, and homes in general. If your home or belongings need to be repaired or replaced, it will cost your insurance company more today than it would have in the past, thanks to inflation. Insurers have to take this into consideration when they calculate premiums.
How you can save on home insurance
There are a number of factors that cause home insurance prices to go up, and unfortunately you can’t control each and every one. The good news is there are some simple things you can do to lower your premium. Here are some of the best ways to save on home insurance.
How to save $ on home insurance
You’ve probably noticed that like most other things in your life, the cost of home insurance is going up. This is thanks to lots of different factors, like changes in the environment, trends in the insurance industry, and even changes in your own neighbourhood. Thankfully, there are plenty of ways you could save on home insurance…like installing a monitored fire alarm or security system, installing a leak-prevention system like a backwater valve or sump pump, or buying coverage for multiple properties (and vehicles, too!) from the same company. Discounts may also be available to people who are mortgage-free, above a certain age, or part of a special group or association. Plus, if you’re in a long-term relationship with your insurance company and you’ve been claims-free for a while, you could be rewarded with even more savings. But wait, there’s more! Believe it or not, these aren’t even all the ways you could save on home insurance. Talk to your licensed broker to find out what you can do to get the coverage and service you want at the best possible price.
Learn even more ways you could save on home insurance:
If you have questions about your home insurance coverage or want to make sure you’re getting the best price available, reach out to your licensed insurance broker today. If you’re looking for an insurance broker, find a broker near you today.
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