One question we get asked quite a bit is why home insurance rates are increasing. This is a great question, and there can be many reasons behind it. Lots of factors go into insurance rates, and it can be confusing. Let’s take a look at some reasons why your home insurance premium might be going up.
Insurance Rates are Personalized
When it comes to home insurance, the premium (or rate) is unique to each person. Things like claims history, payment history and how long you’ve been insured with a company all can have an impact on what you pay for home insurance. Discounts also come into play, so you might receive a discount for having your car and home insured with one agency, for example.
Inflation Can Increase Home Insurance Rates
Though home insurance rates are personalized, there are a few things that do impact home insurance rates in general.
For example, inflation and the rising cost of nearly everything does impact how much home insurance costs. E2value put together a residential inflationary guide for 2022-2023, and it shows some eye-opening numbers. Overall, the inflation rate country-wide within this guide was 8.5 percent.
Rising Cost of Building Materials
In addition, e2value’s guide for November 2020 to November 2021 shows that the price of various building materials has increased.
Lumber was up by 12 percent while asphalt was up by 16.3 percent and concrete and glass by 8.4 percent. Gypsum, commonly used to make drywall, was up by nearly 21 percent. Meanwhile, copper was up by nearly 38 percent, paint by over 12 percent and labor in general up by three percent.
Diesel fuel was the second-highest number in this table, coming in at a whopping 81 percent. The highest is steel, which saw a staggering cost increase of more than 141 percent!
How to Offset Home Insurance Rate Increases
With these soaring numbers, it’s almost a given that home insurance rates are going to go up. However, there are a few things you can do to help offset that increase.
First, you could take a look at increasing your home insurance deductible. Next, make sure you’re receiving all the discounts you’re eligible for. Check into home and auto discounts, new roof discounts and even package discounts if you have multiple policies with one company or agency.
It’s always a good idea to meet with your insurance agent to look for additional ways to make sure you’re protected while keeping budget in mind. Give us a call at Harmoning Agency to review your home insurance and look for additional discounts