Finance Globe

U.S. financial and economic topics from several finance writers.
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Why did Your Home Insurance Premium Increase?

Why did Your Home Insurance Premium Increase?

Many homeowners face this situation: they purchase an affordable home insurance policy with comprehensive coverage. Everything is going just fine, and then they receive a notice that their premium will increase.

If you don’t know why your premium increased, the best thing you can do is consult with your agent. This person can explain what happened and provide information on your options.

Before it comes to this, however, you may want to learn more about some of the most common causes of a home insurance premium increase:

1. Too many claims. This is reason number one. The more claims you make in a short period of time the better chance there is that your premium will spike.

2. Swimming pool installation. Did you recently install a swimming pool in your backyard? As exciting as this may be, you can expect it to increase your home insurance premium. This is considered an additional risk factor, which means your insurance company is likely to adjust your policy accordingly.

Tip: contact your insurance agent before you install a swimming pool. This way you know what you are getting into in terms of a cost increase.

3. Working at home. In today’s world, a growing number of people are working from home. There is nothing wrong with this, but it could have an impact on your home insurance. This is particularly true if clients or prospects will be visiting you at home.

These are just a few of the many reasons why your home insurance premium could increase. If this happens to you, reach out to your agent, ask questions, and decide if there is anything you can do. There may come a point when you need to change companies to secure a lower rate.

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Comments 2

Frank on Tuesday, 24 November 2015 17:49

Great information Chris. I would also add 2 others:
(1) increase in luxury items such as watches, jewelry, etc.
(2) changes to the demographics of your neighborhood: If your neighborhood has an increased crime rate YoY, your home insurance may go up as well.

Great information Chris. I would also add 2 others: (1) increase in luxury items such as watches, jewelry, etc. (2) changes to the demographics of your neighborhood: If your neighborhood has an increased crime rate YoY, your home insurance may go up as well.
Wanderer on Wednesday, 25 November 2015 08:57

Add to the list valuations used by the insurance industry (per square foot) and it comes from costs to replace or build new. This most always increases driving up the value of your property and premium. Note, weather (storms such as hurricanes, floods, tornado's, high winds) in certain geographic areas is also going to have an affect.

Add to the list valuations used by the insurance industry (per square foot) and it comes from costs to replace or build new. This most always increases driving up the value of your property and premium. Note, weather (storms such as hurricanes, floods, tornado's, high winds) in certain geographic areas is also going to have an affect.
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