Many people have noticed their home insurance premiums rising for the past few years. Let’s look at the different factors affecting your premium and what you can do to lower your costs.
Increase in Extreme Weather and Natural Disasters
In the United States, there has been an increase in tornadoes, hurricanes, wildfires and other natural disasters. In 2021, there were 18 weather disaster events in the U.S with losses exceeding $1 billion in damage. This increase in severe weather has caused 39% of all U.S home insurance claims. As a result of this, insurance companies had to increase their rates to pay for these losses.
Rising Material Cost and Supply Chain Issues
The cost of materials and an increase in supply chain issues has risen since the start of the pandemic in 2020. The cost of building materials has increased, such as drywall, lumber, copper wiring etc. Materials have seen a 26% increase in cost. There are also longer wait times to get certain materials. This causes delays and leads to home insurance claims being more expensive for insurers.
Rising Labor Costs and Shortages
The construction industry is also experiencing a labor shortage which makes home building, and repairs take longer to do. 89% percent of contractors are having a hard time finding craft workers and 88% of firms are experiencing project delays.
Property Changes and Attractive Nuisances
If you have made an addition to your home, then this will increase your property value. If you have made any home improvements such as an updated kitchen, then it could cost more to repair and insure. If you have added a pool or trampoline, then you may see an increased premium. This is because pools and trampolines are known as “attractive nuisances” and are considered a higher risk compared to homes without them. Adding a fence and locking gate around your pool can help to mitigate this added cost.
What Can I Do About It?
Although the current market conditions are increasing rates, there are multiple ways you can help control the cost of your home insurance.
- Review Your Policy: Review your policy with your agent to ensure you are getting the right insurance for your needs. Reduce any coverage you no longer need.
- Install Protective Devices: Some insurance companies offer discounts for installing fire alarms, water sensors, and smoke detectors in your home.
- Bundle Your Policies: Many insurance companies offer a discount if you bundle your home and auto insurance.
Let’s Talk
With extreme weather, material costs, and labor shortages on the rise, it is important you keep your home safe. Contact one of our experienced agents today to help you find an affordable and comprehensive plan at 410-742-5111 for our Salisbury office, 302-684-3413 for Milton, and 302-536-9470 for our Seaford office.