One of the questions we most frequently get asked as personal insurance agents is, “Why does my homeowners insurance go up every year when haven’t made a claim?” There are a few reasons for that….
One big reason for the increasing cost of home insurance is that there have been an inordinate amount of storms and hail damage in Tennessee in the last several years. We’ve had multiple storms that have caused trees to fall on homes, wind damage that has broken windows and awnings, and major hailstorms that have destroyed roofs all across Tennessee. Because of these natural disasters, homeowners insurance companies have had to make huge payouts in short periods of time.
Another reason for increasing rates is that the cost to rebuild your home is increasing every year. You have home insurance for the cost to rebuild your home if it were completely lost in a fire, storm or other disaster. The cost to rebuild a new home is always going to cost more than what your home is actually worth in today’s real estate market. Your home may be 10 or 20 years old, and not as valuable as a brand new home, which is what the insurance company pays for when your home is destroyed.
Those are the two main reasons that you’ll see increases in your home insurance each year. Another couple of items to look at when you contact us at Johnston & Associates are your deductible and to ask us to perform an updated replacement cost guide. This assures that your dwelling coverage amount is updated and not too high or too low.
One other thing that can help reduce rates is to package your home and auto insurance together with the same company. We represent numerous carriers that offer substantial discounts for combining insurance. Lastly, adding an umbrella or Life policy can create substantial discounts as well.