Home Insurance Articles
Common Events That Could Raise The Cost Of Your Homeowners Insurance
2010-03-28
Homeowners don't want to increase their home insurance rates. You need to be informed about the different kinds of events that cause your home insurance coverage to increase. Before you buy home insurance, you should be in the know about why your home insurance rates may increase.
One common problem is that people tend to take out too many claims. This might be hard to keep track of because of your particular insurer, but as a guide, more than a couple of claims made in four years could cause an increase in rates. Not taking care of problems in the home that can lead to future damage can result in the same increase in rates. If there was a hurricane, for example, and you didn't fix the leaking roof and then a year later during another storm, you incurred water damage and filed a claim based on that, then your rates might increase if the insurer found your negligence was at fault. Most times natural disasters can't be avoided by you or your home. In the event of a natural disaster like a hurricane, tornado, typhoon, or massive flood where multiple people have damage to their homes, expect your home insurance rates to increase also.
When large scale disasters like this take place the insurance agencies have to pay out large sums of money to policy holders. Their money reserves are usually spent after this, and in order for them to regain their financial losses, they have to raise the price of their coverage in order to do so. In some cases, even such factors as your current credit score and what part of the country you live in can also affect how much you might have to pay for your homeowner's insurance. Upgrading from a smaller house to a significantly larger home will also leave you with rate increases. The more property you own, the more it is going to cost you to insure. Even particular locations can correspond in an increase or decrease in what you would pay for your homeowner's insurance. Living in Beverly Hills would cost more than living in a smaller Midwest town.
However, there are always exceptions to the rule; rates can depend entirely on the circumstances surrounding your claims. If it was due to your negligence, you can count on your rates increasing. If it was outside of your control or not caused by you directly, then you may find only a slight increase in your rates. It is to be expected that there will be regular increases in premiums, even though it's not popular with homeowners. Knowing the types of things that affect your rates will help you in the future.