homeowner’s insurance rates - Spencer Insurance Agency, Inc

Why does my homeowner’s insurance premium increase every year?

We hear this question from clients so I thought some of you are probably not asking us this question but are thinking about it.  So let me answer the question.

There are many factors that will affect your homeowner’s insurance premium including making a claim and increases in replacement value coverage on your home. Weather related catastrophic losses also affect your rates even if you do not make a claim.   Also, each year the insurance company will increase your dwelling coverage to keep pace with inflation.  So you may see a 2%, 3%, or 5% increase depending on the cost of living increases for building materials in your area.  All of us know it will take more money to replace our home today than it did 20 years ago.

But these factors are not why homeowner’s insurance premiums can vary from carrier to carrier.  That is why I always ask our clients to send me a copy of any quotes they receive for a lower premium than they are paying now so I can make sure they are not losing any valuable coverage.

Think about the last time you bought a new car.  I just recently purchase a Toyota Camry.  I could have just gotten the base model but I wanted the hybrid.  I also wanted some safety features.  The one I really like is that my headlights turn when I am making a turn.  Pretty cool.  I also chose some other features that cost me extra money (a navigation system and Apple Car play for example).  I could have just gotten the basic model for less money and that would have been okay, but I wanted more features so I knew I would be paying more. So I paid the extra money and got the car I wanted.  Homeowner’s Insurance is very similar.

What I see when clients send me their quotes is that they are being quoted a basic homeowner’s policy.  Of course the premium is less because they no longer have the coverages we discussed that were important to them. If they want a basic homeowner’s policy I will sell them one IF that is all the coverage they want. But I will make sure they will know what coverage is now missing. Just like my Camry if you want more features you should expect to pay more.

As you know Spencer Insurance Agency represents several quality homeowner’s insurance companies. It seems that all our companies are coming out with new versions of their homeowner’s policy and/or new coverages. Should you switch?  Should you update to the new version? Should you add additional coverages that were not offered before?  One thing I know for sure is that you SHOULD talk to us about your policy.  Our agency tries our best to be as proactive as possible and reach out to our clients if we feel you should make changes. In a perfect world we would talk to all our clients about these updates but we are not perfect and this is not a perfect world.  We can’t get to everyone right away so feel free to call us at any time for a review.

Here are some new coverages being offered by our companies just recently:

  • Service line coverage – Now you can get the coverage you may be paying your water company for to replace a broken pipe from your house to the curb.
  • Mechanical Breakdown – Coverage for appliances, heating/air conditioning systems when they break down
  • Loss forgiveness/decreasing deductible
  • Hidden seepage coverage
  • Roof and siding matching in event of claim

Of course if you add some coverage you will be paying more premium.  You have to decide if it is worth the additional cost to have the coverage.  Just like my Camry I will pay more if I add more features/coverage. Price is important but remember the “True Cost of Insurance” includes the cost you pay out of pocket when you don’t have the proper coverage. If you want a basic homeowner’s insurance policy great, you can have it.  But if you want some better coverage you should expect to pay additional premium.  It is very hard from the policy pages to know all the coverages that are included or missing.  Let us help you.  If we can’t determine whether the quote you received or policy you have with have another agent has a certain coverage , we will tell you what to ask the other agent to make sure you do have that coverage.  Call us today for a review of any policy.

Have you read your Homeowner’s Insurance Policy lately?



I ask this question because many people think that the coverage is the same from one homeowner’s policy to another.  Here is the problem.  You give the coverage page of your current homeowner’s company to another agent who gives you a “comparable” quote.  You assume the quote has the same coverage and the premium is lower so you purchase the policy without checking with your current agent.  BIG MISTAKE!

For example: The “comparable” quote has Water Back Up coverage, which you have on your current policy.  So you have the same coverage, right?  Maybe not.  As independent agents we represent 7 companies.  Our companies cover “Water Back Up and Sump Discharge or Overflow” and the policies state “Water backup is water or water-borne material, which 1. Backs up through sewers and drains; or, 2. Overflows or is discharged from a sump, sump pump or related equipment.

Most companies have similar language however “Company S” and “Company L” add a section which says “the coverage provided by this endorsement only applies to the dwelling described in Coverage A and the following Coverage C personal property items: clothes washers and dryers, food freezers and the food in them, Refrigerators, Ranges, Portable dishwashers and Dehumidifiers.” Just those items are covered… nothing else!

The companies we represent do not have this section, which means they don’t limit coverage for what personal property is damaged.  What if you have a finished basement and have a water back up claim?  “Company S” and “Company L” would not cover your furniture, electronics, toys, your guitar laying on the rug, or items you store there such as clothing and your seasonal decorations.  The “comparable” quote may have been $100 cheaper, but now your additional costs could be several thousand dollars higher because you don’t have the right coverage.

This is just one example.  I have found several differences in coverage when clients send us a copy of the “comparable” quote to review.  Check out my article The True Cost of Insurance.  Many times the “comparable” quote might be lower but is it lower because you have less coverage?  Let us check for you.  Send us copies of any quotes you receive so we can make sure you are not getting less coverage than you currently have now.

What to do after a property loss.

Bad things happen to the best of people; if you suffer a loss here are a few tips
to navigate through this process and help you get on the road to recovery.


  • Look out for the safety of your family.
  • Do not enter your home unless you’re sure it’s safe. Depending on the type of
    disaster, there may be exposed electrical wires, standing water or even structual
    damage. If you have any concerns about the structural or environmental safety of
    your home, do not enter.
  • Contact your insurance company by phone as soon as possible.  You can also follow up with us for any questions you many have regarding your claim.
  •  When reporting your claim have your policy number handy and be prepared to provide
    your contact information so your adjuster can reach you throughout the claim process.
    It’s important that you provide all your phone numbers and email info.

Once the Claims Process Has Begun

  • Take account of your loss and separate the damaged from the undamaged property.
  • If available, provide your adjuster with photos or video recordings of the loss site prior  to the event. This will assist your adjuster with the damage evaluation process.
  • If necessary, have a qualified repair service or contractor make temporary repairs to prevent additional loss. Be sure to obtain a bill or invoice for this service so you can present it to your adjuster for consideration of reimbursement.
  • If  your home is uninhabitable, check with your agent or check your policy to determine if  you have coverage for Additional Living Expenses.
  • Save all receipts to document your increase in living expenses while your home is uninhabitable.
  • Contact the utility companies to discontinue service if your home is uninhabitable or destroyed.

Financial Concerns

  • Investigate the availability of special loans and/or grants via the Federal Emergency Management Agency (FEMA), the U.S. Small Business Administration, the  American Red Cross, local government agencies, private lenders and philanthropic organizations.
  • Call to apply for federal disaster aid at 1-800-462-9029 (or 1-800-462-7585 for TDD Telecommunications Device for the Deaf) or online at FEMA.      You’ll be required to provide your social security number, insurance information and the extent of the damage to your property. Be sure to obtain a control number that is assigned to your application.

Starting that new home improvement project?

Time to remodel or expand the home?  Have you called your insurance agent who insures your home?

Yes, always contact your agent when you start a project.  There are several reasons to contact your agent:

  • You may need to increase your coverage to reflect the increase in replacement cost of your home.  Remember, the majority of homes are underinsured.  Don’t get caught short if you have a fire and need to rebuild your home.
  • If you purchase additional items of personal property, discuss insuring them  to see if you need additional coverage.
  • Consider Flood Insurance; Homeowner’s policies do not cover flood.
  • Check to see if the remodeling earned you any discounts on your homeowner’s insurance premium:
    • Did you add an alarm?
    • Did you upgrade your plumbing, roof, heating or electrical?

Here are a few additional tips:

  • Make sure you contractor is insured.  Ask for a Certificate of Insurance from your contractor with you listed on the certificate.
  • Ask the builder or contractor if you need a Builders’ Risk policy.  Better yet, call your agent and discuss your need for a Builders’ Risk policy.

For more information and tips from FEMA and Spencer Insurance on how to protect yourself from bad contractors, check out our website at http://spencerinsurance.com/remodeling-your-home/.  Don’t find out too late that you did not have the right coverage.  Call your agent as soon as you start planning a project.


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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