In recent months, I’ve noticed some concerning trends affecting homeowners across the
country. You may have faced increasing difficulties in obtaining and retaining your own
homeowners insurance. These challenges have become particularly pronounced, affecting both
new and existing homeowners. After witnessing the rising insurance costs first hand, I felt we
could all use an update on what to expect moving forward.
One of the primary issues homeowners face is the rising cost of insurance premiums. Several
factors have contributed to this increase, including, a rise in natural disasters, a rise in
construction costs, regulatory changes and stricter underwriting standards.
Thanks to the ever improving abilities of computer generated algorithms, insurers are using more sophisticated risk assessment tools to evaluate properties. Homes in high-risk areas or
those with certain construction characteristics may find it harder to secure coverage.
Additionally, homeowners with a history of filing multiple claims may be deemed high-risk and
face higher premiums or even denial of coverage. On top of penalizing owners who file claims,
many insurers consider credit scores when determining premiums.
Even if a homeowner successfully obtains insurance, there is a growing risk of policy
cancellations or non-renewals. This seems to have become very common, once the insurance
company quotes a policy, they are backing out after the full underwriting is completed.
A few things that will surely cause you to lose your coverage is filing multiple claims within a
short period, not keeping your roof in good repair or completing requested safety measures, like
adding handrails will result in a canceled policy.
Despite these challenges, there are steps homeowners can take to improve their chances of
obtaining and retaining homeowners insurance.
First off, maintain your home by completing regular maintenance and repairs. This can reduce
the risk of damage and claims. This includes roof inspections, clearing gutters, and addressing
any issues promptly.
Next you can begin implementing risk mitigation measures, such as installing security systems, storm shutters, or upgrading to impact-resistant roofing. These features can make your home more attractive to insurers.
It's also crucial that you don’t settle for the first insurance quote you receive. Shop around and compare policies to find the best coverage for you at a reasonable price. Once you do find the right one for you, consider bundling your homeowners insurance with other policies, such as auto insurance. Many insurers offer discounts for bundled policies.
And one last recommendation is to improve your credit score. Since credit scores can impact
your insurance premiums, take steps to improve your credit score by paying bills on time,
reducing debt, and correcting any errors on your credit report.
One local insurance contact I know, Kevin Hyatt with The Hyatt Agency, had this to say about
the current insurance market. “Home insurance has always been a complex thing for people to
dive into on their own. And it still is today, however, the new era home insurance market has
grown to be much more difficult for prospective home buyers to deal with. The condition of roofs
has in my experience never been more important than it is today. Some insurance companies
have even gone to the extent of requiring home inspections prior to binding coverage on a home
because the cost to repair roofs and siding on the homes has increased so much over the last
few years. When I first started out in insurance, requiring a home inspection prior to coverage
was almost unheard of, but now unfortunately, it is increasingly becoming the norm for several
home insurance companies.”
He went on to say “I would encourage all new prospective homeowners to do their due diligence
on a few key things. 1) Termite inspection (do not skip it!) your home insurance will not typically
cover terminates and they can cause your home thousands and thousands in damage. 2)
Request a new roof be put onto the home before purchase even if only 10 years old. 3) Pay for
the very best home inspection you can afford to limit challenges when getting your home
insurance.”
As the landscape of homeowners insurance is becoming increasingly complex, with rising costs,
stricter underwriting standards, and the risk of policy cancellations, by understanding the factors
at play and taking proactive measures, homeowners can navigate these challenges and secure
the coverage they need. Remember, the key is to stay informed, maintain your property, and be
proactive in seeking the best insurance options available.
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