Q: Why are my Homeowner’s Insurance rates going up when I never filed a claim?

A: Yes, most of our clients are seeing rate increases on their Homeowner’s Insurance even when they have not made a claim.  There are many reasons why this is happening. Let’s look at a few reasons:

  • Due to the number of natural disasters that have occurred in the last few years there has been a high demand for building supplies to repair or replace homes. This increased demand increases the cost of these supplies making rebuilding a home more expensive. Insurance companies want to make sure your coverage is still enough to rebuild your home so they will increase your Dwelling coverage each year by a cost of living adjustment, which in the “rebuilding world” has been around 4 to 5%.  Therefore, at minimum, your premium will increase due to the increase in your dwelling coverage.
  •  In the last few years in Pennsylvania we have seen a hurricane, tornados, blizzards, severe thunderstorms and even an earthquake! The frequency of these events has taken its toll on insurance companies.  Many insurance companies are paying out more in claims than they are bringing in with premiums.  One of our carriers had more claims in the first six months of 2011 than they had in all of 2010.  These claim results were not anticipated when the rates were set up.  Adjustments to rates are necessary to maintain availability of homeowner’s insurance in Pennsylvania.
  • It is important that you report claims as soon as possible directly to the insurance company. This will speed up the claims process. However, after you report the claim call and discuss your claim with us.  Most companies offer a “Loss Free” discount and also charge an additional premium if you make a claim. This could result in a large increase in your insurance rates.  Discuss your claim with us so we can review your options and make sure you don’t receive a small claim payout and get hit with a large rate increase.

The real question you should be asking is not “Why are my Homeowner’s Insurance rates going up?”, but “Do I have the proper coverage to protect me from all these events and are my Homeowner’s rates competitive?” 

This is where Spencer Insurance Agency can help you. . . 

Spencer Insurance Agency understands that the price of your insurance is important to your budget. However we realize that your “True Cost of Insurance” can be much higher if you are not properly protected. Always contact us before switching companies.

Spencer Insurance Agency customizes your insurance package to reflect the risk you face.  As Independent Insurance Agents, Spencer Insurance Agency represents several top rated insurance companies and can choose the company that has the right insurance package for your needs. We do the research for you. Spencer Insurance Agency may not be the lowest or highest price, but you will know you have the proper protection at a very competitive price.  Check with us to make sure you are getting all the discounts for which you are entitled.  Consider insuring your auto and home with the same company to maximize your discounts.

As the saying goes.  . . Don’t be penny wise and pound foolish!  Call us today for a review.

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