Factors that can cause your home insurance rates to increase.
Now that 2020 is underway, you may be approaching the renewal period for your homeowners insurance. Leading up to your renewal, your insurance provider will give you a summary of your coverage and an overview of your premiums. At this time, you may notice that your rates have gone up. But what is the reason behind this increase? Here are some of the factors that can cause your home insurance to become more expensive.
- Home Updates or Renovations– If you have recently completed home renovations or updates that increase the value of your property, you may have to increase your home insurance coverage limits accordingly. More coverage means higher premiums, so this could explain why your premiums have increased.
- Frequency of Extreme Weather Events– In recent years, the number of wildfires, windstorms, hurricanes, tornadoes, and other extreme weather events have increased significantly. As the frequency of these damaging events increases, insurance companies must increase their rates so that they can keep up with resulting home insurance claims.
- Local Crime Rate– When calculating your premiums, your home insurance provider will look at the local crime rate to determine how likely you are to become a victim of theft or vandalism. If your local crime rate has increased over the past year, then your insurer will consider you a higher risk to insure. As such, they will also increase your premiums.
- Cost of Repairs and Replacements– As the cost of emergency cleanup services, skilled trades, personal belongings, and home values increase, so does the amount of money that insurance companies have to pay to address policyholder claims. Insurance companies will increase policy premiums to offset the higher cost of claims.
These are some of the major factors that can cause your home insurance premiums to increase. Do you have more questions about your home coverage? If so, then contact the experts at Phocus Insurance in Phoenix, Arizona. We are ready to assist you with all your insurance needs today.
