Great Tips to Deal with Insurance Rate Increases

22 Sep
Tips to help you deal with major home insurance rate increases

Some home insurance companies use a sophisticated algorithm that determines how sensitive a customer is to price increases.

You just received your latest homeowners insurance bill and are shocked by the number sitting at the bottom of the page. It’s much larger than the last one and you cannot for the life of you understand why your rates have gone up because you have never made a claim on the policy.

One reason for the increase may just be the fact that the cost of both building materials and labor has gone up over the last few years. Insurers must factor in these increases when calculating premiums and that can definitely push up your rates, regardless of whether you have made a claim or not.

Some insurers have also adopted a practice called price optimization, which basically means that insurance companies use a sophisticated algorithm that determines how sensitive a customer is to price increases. If it turns out you have a high threshold for price increases there is a good chance your rates will be headed up, for no reason at all.

So What Should You Do?

There are a few things you can do to help offset the cost of a premium increase. While not all of these may be options for every household, there is bound to be one or more that you can incorporate to help make your insurance premium more affordable.

Bundle: If you don’t have all of your policies with one insurer, you could be missing out on some savings. In most cases, bundling your home, car and life insurance with the same insurance company will result in a discount of up to 25 percent. If your current insurer doesn’t offer a discount for bundling, it’s time to find a new insurance company.

At HomeInsuranceKing, our process is to provide up to 12 competitive home insurance rates while also helping you consider additional savings for home and auto insurance packages.

Raise Your Deductible: Bumping up your deductible will absolutely lower your premium but you need to make sure that you can cover the cost in the event of a claim. Jacking the deductible from $500 to $1000 or even $2,500 can result in a hefty premium drop.

Shop Around: In many cases, the best way to lower your insurance premium is to shop your coverage around. Most experts agree that shopping your coverage should be done on a regular basis, once a year if possible. The smart money suggests getting at least 5-10 quotes from a variety of insurers to make sure you find the best deal.

When shopping your coverage be sure that you are comparing apples to apples when it comes to coverage levels and deductibles. We can help you find the best policy possible. Simply complete our easy online home insurance quoting system application and we will help you compare rates for the most competitive prices in your zip code.

Other Discounts: Insurers offer a variety of discounts and you should make sure that you are getting every discount that you are qualified to receive. Look for discounts for alarm systems, sprinkler systems, and even a new roof. Asking your agent to run a discount check will help ensure that you are getting all available discounts.

A Few Things to Remember

While price is important, when it comes to insurance, price should not be the only consideration. A great price will be of little comfort when it comes time to make a claim and your insurer is slow to respond to your requests or refuses to cover the damage. Check out all insurers you are considering, especially if they are not a well-known national company.

Never, ever lower your coverage levels in order to drop your premium. This can be a huge mistake in the event of a catastrophic claim. While the insurer will pay out the full amount of the policy, if your home is not insured for the full cost of replacement, you will be on the hook for a big chunk of change.

Finally, if updates have been made to the home, notify your insurer. Upgrades like a new roof, new wiring or plumbing can result in a discount that will lower your rate and can help you save up to $300 to $700 a year in premiums. It is also important to notify your insurer about upgrades because its possible that you will need to increase your coverage levels.