First, you need to know that home insurance rates are constantly changing. Just because you had a great rate last year doesn't mean your rates will stay the same. In fact, many home insurance companies revise rates yearly. Some by just a little, and others by quite a bit.
Insurance companies depend on many factors when setting rates, some of which are within your control and others that aren't.
Below, we outline some of the most common reasons your home insurance rates might increase.
Rising Home Values
If you live in an area where home values has been rising, your home insurance rates will likely increase as well. That's because insurance companies insure your home for its replacement cost, which is the amount it would take to rebuild your home if it were completely destroyed.
As home values increase, so do the replacement costs and your home insurance rates.
If you live in an area where home values have been stagnant or declining, you might actually see a decrease in your home insurance rates.
Bad Weather
When bad weather is projected, insurance companies will often increase rates in anticipation of an influx of claims. So, if you live in an area prone to bad weather, you can expect your rates to go up when severe weather is on the horizon.
There isn't much you can do to control the weather, but you can take steps to protect your home from severe weather damage. For example, you can have your home inspected for hail damage and make any necessary repairs. You can also install hail-resistant roofing, which could lead to a discount on your home insurance rates.
Increased Crime Rate
If you've made additions or renovations to your home, your home insurance rates will increase. That's because a larger home is more expensive to rebuild than a smaller one and carries a higher risk.
Even something as simple as adding another bathroom can increase your rates. Similarly, adding a new roof, deck, or pool will also lead to higher rates.
Your Home is Getting Bigger
If you've made additions or renovations to your home, your home insurance rates will increase. That's because a larger home is more expensive to rebuild than a smaller one and carries a higher risk.
Even something as simple as adding another bathroom can increase your rates. Similarly, adding a new roof, deck, or pool will also lead to higher rates.
Aging Infrastructure
If your home's infrastructure is aging, your home insurance rates will increase. That's because older homes are more likely to have electrical, plumbing, and heating/cooling problems.
Additionally, older homes are more likely to have asbestos, which is a hazardous material that can lead to expensive repairs.
Credit Score
Your credit score is one of the most important factors in determining your home insurance rates. Insurance companies use credit scores to determine how likely you are to file a claim.
Generally, the higher your credit score, the lower your rates will be. So, if your credit score has decreased since you last shopped for home insurance, you can expect your rates to increase.
You've Been Filing So Many Claims
If you've filed many claims, your home insurance rates will increase. That's because insurance companies see frequent claim filers as high-risk customers.
This is the case even if you have a valid claim. For example, if a severe storm has damaged your home, you'll likely have to pay a higher premium even though the damage wasn't your fault.
You've Added Some Exotic Animals or Dog Breeds
Exotic animals that may raise your Colorado home insurance rates include alligators, snakes, monkeys, and other non-traditional pets. This is because these animals can pose a liability risk if they injure someone.
Additionally, some dog breeds are considered high-risk and may lead to higher rates. These breeds include Pit Bulls, Rottweilers, Dobermans, German Shepherds, and Chow Chows.
You've Started Operating a Business from Home
If you've filed many claims, your home insurance rates will increase. That's because insurance companies see frequent claim filers as high-risk customers.
This is the case even if you have a valid claim. For example, if a severe storm has damaged your home, you'll likely have to pay a higher premium even though the damage wasn't your fault.
How to Lower Your Home Insurance Rates
You can do a few things to lower your home insurance rates.
First, you can shop around and compare rates from different insurers. Insurance companies use different criteria to determine rates, so you may be able to find a better deal by shopping around.
You can also try to negotiate a lower rate with your current insurer. If you've been with the same company for a while, they may be willing to give you a discount.
Additionally, you can try to offset some of the risk factors that lead to higher rates. For example, you can install a security system or get a dog to deter burglars.
You can also improve your credit score or pay off any outstanding debts. These factors will show insurers that you're a low-risk customer and may lead to lower rates.
Finally, you can raise your
deductible. This will lower your premiums, but you'll have to pay more out of pocket if you do have to file a claim.
Have Questions? Compare Home Insurance Quotes
If you have any questions about home insurance, our experts can help. We can answer your questions and help you compare quotes from top insurers. Whether you’re in our neighborhood of Green Valley Ranch, or anywhere else in the Colorado, we’re here to assist with all your personal insurance needs. Find us on the web at
www.badgerinsuranceadvisors.com
or call us at 303-359-1799.
Kevin Volz – Agency Principal
Badger Insurance Advisors