How (And Why) Rates Rise
It’d be fair to call 2022 the year of rising prices and costs. As a result of pandemic-era policies, supply chain snarls, and productivity issues, inflation has surged to levels not seen since the 1980s. These factors are also to blame for another category on the rise: home insurance premium rates.
Since the beginning of 2021, home insurance premium rates have risen 9.3% according to S&P Global Market Intelligence (SGPI). Supply chain disruptions and labor shortages have pushed them higher, with costs of home repairs and replacements rising too. And experts say natural disasters like tornadoes, floods, and wildfires are boosting insurance risk, which also leads to higher rates.
Reevaluate Your Coverage
Now is a good time to consider strategies that could save you money on home insurance — especially true given the Insurance Information Institute, also known as Triple-I, is predicting rates will move higher in 2023.
One option toward cutting your premium is raising your deductible, which is the amount you must pay out of pocket before insurance coverage kicks in. Just be aware of the risks, especially if you live in a disaster-prone area. Or try eliminating potentially extraneous coverage, such as for freestanding structures. If you don’t have a shed, free-standing garage, or pool, you may be paying for coverage you don’t need.
Discounts and Bundling
One of the simplest ways to save money is by bundling home and auto insurance policies. Because insurance companies are in such close competition, discounts are often offered if you maintain multiple policies with a single firm. Additional discounts can sometimes be triggered by installing things such as hurricane shutters and water-leak sensors.
Finally, if you can stomach the paperwork and logistics involved, switching carriers each year can help save. Some insurers offer discounts up to 10% if you get a quote and change to a different carrier. The key is to be proactive, do your research, and turn off autopay.
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