You’re probably paying more — in some cases a lot more — for home owner’s insurance. In fact, nearly 90% of homeowners have seen their home insurance premiums rise over the past year, according to Policygenius’ analysis of policy renewals from May 2021 to May 2022.
The company found that premiums rose by more than 12%, on average; Now homeowners insurance costs an average of $1,899 per year for a policy of $300,000 in home coverage. And Insurify’s 2023 US Home Insurance Report released this month reveals that home insurance rates rose 19% in 2022. What’s more, according to the company’s forward-looking projections, they’re expected to rise another 9% in 2023.
Why the increase? Rising material costs and delays in the supply chain have increased the cost of rebuilding homes in the event of a claim. Increases in severe weather caused by climate change have led to higher incidences of fire and water damage, driving up premiums.
Should you switch insurance companies to save money?
Pros say it’s definitely worth the chance to switch and save. There is a common misconception that when a consumer stays with the current insurance company, there is meaning to that longevity, says Ted Olsen, managing director of Goosehead Insurance. “Unfortunately, almost the opposite is true. Many insurers target specific consumer markets and when that consumer holds the policy in perpetuity, even when their profile changes, they exit that target market and pay more. It is definitely in the consumer’s best interest to find companies Insurance that meets his needs in the right place.
Note that there is no hard and fast rule for how long you should stick with a provider, but Olsen says switching every 3 years is the average. “You don’t want to switch too often, because companies look at how long you’ve been with your current provider as one of their factors, and sometimes companies offer annual savings if you keep your policy,” says Olsen.
What to look for in a new home insurance policy
Before switching between insurance companies, Quentin Coolen, CEO of Waffle, an insurance one-stop shop, says it’s essential to compare the different insurance options available on the market. I can’t stress this enough: the cheapest price isn’t necessarily the best deal. This is because the coverage, limits, and/or deductibles of the cheaper policy may not be as good as the current policy,” Colin says.
When weighing your options, Coolen says to make sure the company you’re considering is highly rated by third-party sites like Bankrate or NerdWallet, has good customer ratings on third-party sites like the Better Business Bureau and a good claims history should be visible on any of the sites listed. above. “If at all possible for your situation, make sure your new insurance coverage meets the requirements set out in your mortgage, lease, or loan, if any,” Colin says.
Also, know that prices change daily. “Home insurance rates change daily, just like auto insurance, because financial markets influence the prices of building materials and the labor needed to rebuild a home,” says Michael O’Revis, Senior Vice President of Operations for SmartFinancial, Insurance Marketplace.
It’s also worth having an independent insurance agent help you, says Divya Sangam, insurance spokeswoman for LendingTree. “Professional organizations such as Independent Insurance Agents and Brokers of America have searchable directories that will help you view all of the independent insurance agents operating in your zip code,” says Sangam.
Once you get a new quote that you’re happy with, use it as an opportunity to contact your current insurance company and ask them if they can do better. “As a ready-to-switch customer, you now have the leverage. Use it,” Colin says. It’s also wise to familiarize yourself with the cancellation process, he notes, because depending on the type of insurance, there may be fees for canceling your existing policy. “Before making a decision, make sure the cancellation fee doesn’t exceed the savings from the new policy,” Colin says.