Are you sick of your home insurance rate going up! Does it seem like every year you have an increased cost to insure your home. Lets take a look at why this happens and how we can help you!
What is Home Insurance?
To understand why you insurance rates are going up we have to first look at what home insurance actually covers.
Dwelling:The coverage most people associate with home insurance is the actual dwelling itself. Home insurance is designed to cover your home against covered perils. Each policy is different, so you will want to read your declarations page to make sure you actually know what is covered.
Other Structures: Your home insurance covers any other structures you may have on your property. This could include anything from a fence to a shop. A Other Structure is considered any type of other structure that is not attached to your house.
Liability Insurance: Your home insurance can help protect you against possible injury or damage to another persons property. This is one of the most important coverage when it comes to home insurance. It coverage will typically range anywhere from $100,000 to $500,000 but it can go as high as a million or more.
Here’s an example of why this is important, your neighbor’s kido gets seriously hurt on your property. If you don’t have home insurance that provides personal liability coverage you could be liable for all of their medical bills, recovery expenses and any pain and suffering if you are found responsible for their injury.…
Personal Property: You have worked so hard to purchase all your belongings and your home insurance protects them. If you have a covered loss and your covered personal property is damaged then your home insurance can provide you coverage to replace those items and put everything back to normal.
If your belongings burn up in a fire, your home insurance will help cover you belongings. It is important to remember that your policy will have special limits on guns, jewlry, art, silverware and possibly other personal property.
Loss of Use: Loss of use is designed to provide coverage to help cover extra expenses if you are put out of your home. Coverage only applies if it is due to a covered peril.
If you have a major water leak that puts you out of the house, the insurance company will help cover extra expenses. This could include getting a hotel room, renting an apartment, ect. Coverage only applies if it is a covered loss.
Medical Payments: If someone gets hurt on your property, you policy may have medical payments coverage. This typically rates from $1000 to $10,000.
Reason 1: Home Insurance isn’t the Same
The first home insurance policy similar to the policy forms today, was introduced in the 1950’s. Prior to the 1950’s, separate polices covering different perils like theft, fire losses, personal property, ect. Policy’s were finally completely standardized when ISOs were created in 1971. Originally many just referred to home insurance as fire insurance. You will still hear this term from time to time from retired individuals because this is what home insurance was mainly designed to cover. Modern developments or coverage were added over time.
As companies continue to add bells and whistles to their polices, it comes at a cost. Companies have to pay for losses by spreading it out against it out against their risk pool. As different coverage gets added, the company will likely have more loss thus increasing home insurance pricing.
Reason 2: Cost to Rebuild
Have you looked at home prices lately? Prices continue to rise as there is a current shortage in home inventory. Many homes are being sold in record numbers and also record time. As the cost of houses rises, so does the cost to build due to the demand. It has a domino effect on your home insurance prices.
When the cost to build goes up, every time the insurance company has a claim they have to pay their cost also increases. Lets say the cost of new builds rose by 10% last year in your area. Now for every time the insurance company has to rebuild a home, they do at an additional. In return, they have to raise rates for customers.
Reason 3: Claims. Claims and More Claims
Between earthquakes, hurricanes slamming the coast and wildfires in California, Insurance Companies are seeing claims come in like never before. What does this mean for their customers? Price will definitely be on the rise. As companies start to lose money due to claims, they will have to start increasing pricing.
Reason 4: Rise in Medical Costs
Have you been to the doctor or hospital lately? If so, you will likely have noticed an increase cost. As health costs go up, so does your insurance. Remember that you policy will have medical payments and also personal liability. That slip and fall on your property will cost the insurance company more today than it has in the past.
Lets get to how we can Help You?
There are three ways to purchase insurance. Directly from a company, through a captive company or through and Independent Insurance Agent. Purchasing through the company directly gets you access to only one company. If your rates go up you either have to sacrifice coverage or start shopping again. An agent with captive company only has access to one or few companies. Once again if your rates go up, its time to shop your insurance again. Now enters the Independent Insurance Agent!
An Independent Insurance Agent like MBG Insurance has the ability to work with multiple companies to compare rates and coverage. Insurance companies are constantly adjusting rates and home insurance coverage to get an edge on their competitors. Having access to multiple companies gives the independent agent, the ability to help shop your rates yearly.
How can I find an Independent Insurance Agent?
Look no further! At MBG Insurance, not only are we an Independent Insurance Agency but we are one of the top rated agencies in the Springfield Area. We can help compare premiums with over 20 A Rated companies without having to call around. You can get started in the form below.