Examine your homeowners insurance for coverage, price

July 2023

Have you noticed that the cost of owning your home is going up? One of the reasons for this is the increase in homeowners insurance.

Every year a homeowner can look forward to that dreaded letter from their home finance provider outlining the cost of homeowner’s insurance, taxes and other costs paid out of their mortgage reserves. Mortgage reserves are the “extra” money added to your mortgage loan payment that are set aside to pay these bills when they come up.

From what we have been seeing from our clients’ experiences, you too may experience some sticker shock on those policies the next time your premiums renew.

While you don’t have much control over increases in taxes, you may be able to save a bit of money by shopping around for homeowners insurance.

Most insurance professionals agree that it is a good idea to sit down every couple of years with your agent to re-evaluate your coverage, just to be sure you have the insurance coverage you need.

In fact, we talked to a longtime agent at Durney Insurance in Hoquiam who said that if you haven’t read your homeowners insurance policy for a while, that would be a great place to start.

“If you need a copy, just about any agent can quickly e-mail you a copy of your current policy,” she said.

If you talk with your agent, he or she will review coverage amounts, deductibles, and may also make suggestions on ways you might be able to save money by shopping other plans for you or by bundling your other polices to receive discounts. (Or, as the Durney agent said, sometimes the best prices and coverage can come when you “unbundle” car and house coverage, shopping for the best deals individually.)

Have you installed video surveillance cameras? Put on a new roof or added a pool or hot tub? Did you get a dog? All of these things may impact your insurance premium.

One of the easiest, quickest things to do to lower your annual insurance costs is to increase the amount of the deductible required if you need to use the policy, the Durney agent said.

“Many people have it as low as $500. You pay much less in insurance premiums if you increase that, to say, $5,000,” she said, “It’s important to keep your deductible as high as you can.”

Sometimes people don’t understand that if they had a major claim, they don’t literally have to pay out the deductible first. Instead, that amount of money is simply held back from reimbursement for the repair of your home.

Besides, with lower deductibles, people are more prone to turn in several smaller claims, which will increase your rate, or may even cause you to be dropped at renewal time.

Another key way to keep your home insurance rates lower is to keep up with maintenance – especially the heating, plumbing, wiring and roof. “Those are the four major things you should keep updated to avoid needing your homeowners insurance,” the Durney agent said.

In addition, remember that homeowners insurance does not cover damage caused by poor maintenance!

A house with good “curb appeal” – no broken windows, peeling paint, rotting deck or mossy roof – can sometimes even cost the homeowner less in insurance premium because that pride of ownership could make a homeowner eligible for a preferred market policy instead of the standard market policy.

Why are homeowner insurance premiums rising?

Homeowners insurance premiums are rising for many of the same reasons auto insurance policy rates are affected – increased costs of materials and labor. For homeowners, the increased insurance costs reflect:

Dramatic increases in construction labor and materials costs on new homes and home repairs.

• The aging of your home. As your home ages, it’s more likely that things break. Water damage and other potential major costs are more likely with time.

• A history of claims filed. The more claims you file over time, the more expensive your insurance premiums become.

• New flood insurance requirements or other special coverage costs.

It’s okay to shop around

As we mentioned, after going through your homeowner coverage with your agent in detail, you should have a good outline of your needs so you can shop several other insurance agencies. You may find a better deal elsewhere, or you may confirm that you already hold the best policy for your needs.

But the value in your insurance policy isn’t just what it costs. Remember, that “service” is part of the insurance package.

An inexpensive policy purchased online (called a “direct write”) might be friendly to your budget but may not offer the same fast and personal service a local agent is known for when something happens. This can be vitally important when you have a catastrophic event (think tree falling on your house) and you need a fast response to your situation.