Homeowners insurance premiums have been on the rise in the last decade and even more since the onset of the pandemic in 2020, as building materials have become more expensive and supply chain issues have increased.
Labor costs have also been growing, so there are forces driving up costs on all fronts. According to ValuePenguin.com, based on a survey from state insurance filings in over 31 states, premiums have increased by 59% over the last decade.
A typical policy covers at least 12 perils, which are fire or lightning, smoke, windstorm or hail, explosion, riot or civil commotion, impact from vehicles or aircraft, vandalism, and volcanic eruption.
A more robust policy would be a form HO5 (all perils), or an H03 (all perils for structure, named perils for personal property). All perils simply means it covers all causes of loss, unless specifically excluded, whereas named perils are only what is written in the policy.
Regardless of the type of policy, a homeowner should always make sure they have “replacement cost,” which means if or when you have a claim, they replace the damaged property at the cost of it being new instead of depreciating the property.
- To determine your coverage, check your declarations page.
- To understand your coverage, and to make sure you have enough coverage, schedule an appointment annually with your insurance agent.
Your agent will be able to show you the calculations on the reconstruction cost of your home (if damaged) to assure you are covered properly. Not only does this give you the opportunity to review the coverages and how they apply, but it is also a good time to review and address any rate increases the insurance company has made.
You can also add on additional coverage to your homeowners insurance, such as flood insurance, earthquake insurance and others. Additional policies should be considered if the base homeowner policy limits or excludes the coverage on said property. For example, a homeowners policy usually only covers a couple thousand dollars on items like jewelry, furs, artwork, and boats. They not cover these items for “mysterious disappearance” or if lost. These items are better covered on a separate policy. Additionally, we see more and more homes flooding outside of what are considered high-risk zones. Flood insurance is very affordable if you don’t live in a high-risk zone.
Looking to save money? The best way to reduce the cost of a homeowners policy outside of raising your deductible is to keep the home well-maintained to qualify for as many discounts as possible, and to combine your policies under one carrier. It is also wise to have an independent agent shop your policies every three years. Sometimes the best way to reduce the premium is to switch companies.
For more information about various types of insurance coverage and policies or to get a quote, reach out to The Churchill Agency today via 855.531.8777 or insurance@thechurchillagency.com.