Houston - Many homeowners are getting hit with higher rates for homeowners insurance even though they haven't filed a claim. What’s going on here?
Homeowners insurance premiums spiked 6.6% in the 3rd quarter of 2021, after being up 4.8% in quarter 2, according to MarketScout, which tracks insurance rates. Texas has the fifth-highest average homeowners insurance rate in the country at $3,429, reports Insurance.com.
You could say it’s a perfect storm.
"You’ve had six years of severe losses in the insurance property space. And that’s not even counting the California wildfires that seem to be on a yearly basis," said Ken Gregg, homeowners insurance expert and CEO of Orion180.
Wildfires, hurricanes, and now a hot housing market driving up values, and supply chain disruptions inflating building materials.
"To rebuild your home might have been $200,000 last year, but now might be $250,000. Your rate is based on $250,000," he explained.
Gregg says you can cut your rates by increasing your deductible. The Insurance Information Institute says you can save up to 20% by raising a deductible from $500 to $1,000.
"The higher the deductible you get, you get a bigger discount. Because you're going to make sure that's a well-maintained risk," said Gregg.
You can make your home more secure against a loss. Smoke detectors, burglar alarms, and deadbolt locks can save you 5%. If your home is prone to severe weather, you can also install impact-resistant windows or replace the roof.
"Replacing that roof will get you big savings on your insurance. The type of roof, a shingle roof, metal roof, or tile roof will s/ave you some money," said Gregg.
Some additional tips include:
- Ask for discounts if you don't have any smokers at home, recently bought the house, choose paperless billing, or set up automatic payments.
- Bundling your insurance with other policies, like auto insurance, can save you 5% to 15%.
- Building your credit score can also result in lower insurance rates.
- Get rid of high-risk items, like trampolines and playground equipment.
- Shop around for the best rates.
"I would use an independent agent to find me a quality policy, make sure I have the appropriate coverages to cover the appropriate risks that fit my risk tolerance," said Gregg.
The Texas Department of Insurance offers a tool to help you compare insurance plans.