Get The Coverage You Need And Keep Your Rates Low
There are a few things you can do to get the coverage you need and avoid paying sky-high premiums.
- Pick an insurance provider that rewards you for taking proactive steps like installing smart home devices to improve your homes health .
- If you dont want to pay for a home warranty, look for a company with their own home repair services to make sure you get the help you need when you need it. Learn more about the difference between warranties and home insurance here.
- Be strategic about when you file claims. Filing low-cost claims or multiple claims within the same year isnt always the best idea.
- Remember, the type of claim you file matters too. Filing a weather-related claim is less risky than a liability or personal property claim, given they are more likely to reoccur.
Finally, understanding the laws that prevent companies from raising your home insurance rates is paramount. These laws vary by state, but generally, you wont see an insurance claim spike from any weather-related claims. Some states even ban price hikes for small claims, claims denied, or claims that didnt end up costing providers anything. For a complete list of laws in your area, its best to check with your state government.
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Features In Your Home
Certain features of your home can also increase your insurance rate. Having a pool, hot tub or outdoor spa can increase your homeowners insurance premiums. Those items create greater liability and a risk of injury or death. From 2005-2014, there were more than 3,500 unintentional drownings in the U.S. Its part of the reason the Insurance Information Institute recommends homeowners increase their liability coverage from $300,000 to $500,000.
What Gives Why So Different From State To State
The differences come down to the rules states set for insurance companies and the difference in weather from state to state, says InsuranceQuotes.com Senior Analyst Laura Adams.
And what sounds bad — being in a state where rates get bumped up pretty heavily after the first claim — can actually be a good thing.
In some states where were seeing big rate increases, consumers are getting low rates to begin with, she explains. If you live in one of those states and never file a claim, you continue to get the advantage of the low initial rate. If you file a claim, however, you pay a heck of a lot more after that claim.
And what sounds good — being in a state where your insurer either doesnt bump your premium for filing a claim or bumps it only a bit — can be bad because you may be paying a pretty high premium to begin with, especially if youre in a state prone to weather-related insurance claims like hurricane-prone Florida.
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Materials Construction Age Of Roof And Insurance
Your roof materials are an essential part of determining the overall quality of your roof. Renovating or reinforcing your roof with stronger materials means your home could be less likely to experience costly damage during harsh weather conditions.
Roof materials are rated on a scale of one to four by insurance companies, so looking for modern, Class 4 materials will help result in the biggest shift in your homeowners insurance rates. This can include stronger shingles made from copper, aluminum, resin or plastic. But lets take a look at the most common types of roofing materials for homes
1. Asphalt Shingles
- Average Lifespan: 25 to 30 years
- Roof Material: Combination out of fiberglass, asphalt and paper fibers
- Durability: Among the least durable roof materials available
- Cost: Among the most expensive to choose from due to maintenance to retain effectiveness
- Look: Available in either a standard, single-thickness or a thicker, laminated shingles
- Compatibility: Can be installed on every roof up to relatively steeper finishes
- Natural Disasters: More effective at withstanding fire damage than wind damage
2. Wood Shingles and Shakes
3. Concrete & Clay Tile
4. Metal
Will Homeowners Insurance Pay For a New Roof?
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Construction Costs In Your Area Affect Your Rebuild Cost
When a home is impacted by severe weather, you may need to rebuild your home or even replace it altogether. Unfortunately, when catastrophic weather hits, many homes in a given area can be impacted, which may force a spike in the cost of construction materials. And as you might expect, laborers are in higher demand in those areas, and their rates typically escalate in the aftermath of a hurricane, wildfire or tornado. And if youve got an older home, the cost of getting your home to be rebuilt according to modern building codes can be costly.
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Why Do Insurance Premiums Go Up After Filing A Claim
Homeowners insurance rates often increase after a claim because it leads your insurance company to believe that you are more likely to file another claim in the future. This is especially true for claims related to water damage, dog bites and theft. To compensate for another potential claim payout, the property insurer proactively raises your premium.
As mentioned, whether or not your insurance premium increases after a claim is situational. Certain types of claims affect insurance rates more than others. You should expect your rate to go up after a claim if you fall into any of the following categories:
- You live in an area with severe weather
- Your home is located in a high-crime area
- You have filed liability claims in the past
- You own a home with a history of claims
- You file more than one claim over several years
Generally speaking, your insurance premium is more likely to increase if you file a liability claim rather than a property damage claim. With a liability claim, there is a chance that you could face a lawsuit. Legal fees and court settlements can be very expensive, which means there is added risk for you and your insurance company.
Do I Have To Pay A Deductible For Hail Damage To My Roof Or For Other Hail Damage
Following Hurricane Katrina in 2005, insurers decided that homeowners in states susceptible to hurricane and wind damage needed to pay more for protection.
“There are two kinds of wind damage deductibles: hurricane deductibles, which apply to damage solely from hurricanes, and windstorm or wind/hail deductibles, which apply to any kind of wind damage,” according to Barry, which notes that these deductibles are based on a percentage of the home’s insured value.
Typically, he says, the deductibles range from 1% to 5% of the home’s insured value, depending on where the home is located and the historic storm and hail damage in the region.
“In some states, policyholders may have the option of paying a higher premium in return for a traditional dollar deductible,” according to the III.”In some high-risk coastal areas, insurers may not give policyholders this option, making the percentage deductible mandatory.”
Again, Barry says homeowners need to discuss their situation with their insurer to know exactly how much coverage they should consider and how much it will cost.
There are currently 19 states that have mandatory hurricane deductibles, which also cover hail damage. They include Alabama, Connecticut, Delaware, Florida, Georgia, Hawaii, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Texas, Virginia and Washington, D.C.
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Your Home’s Value Increases As It Ages
Homes generally appreciate in value, so replacement cost tends to increase over time. As a result, the amount of insurance you need to purchase to fully cover your home goes up over time, said Dale Riemer, American Family personal lines pricing director. For example, you may insure your home for $200,000 in year one, $210,000 in year two, and so on. This need for additional insurance results in additional premium. “For American Family, historically replacement cost values increase by about 3% to 6% per year, which can vary by geography. These increases in replacement cost roughly translate to premium increases of 2% to 4% historically,” said Riemer. “This being said, we are in a unique time – since Q3 last year, lumber costs have skyrocketed, and contractor costs have increased more than usual as well. As result, the historical 3% to 6% increase in replacement cost stated above has been most recently in the range of 8% to 11%, resulting in higher premium increases in the neighborhood of 5% to 8%. Its unclear how long these elevated increases in replacement costs will persist. To conclude this first item, these increases in values of property usually happen every year, and have nothing to do with whether or not an insurance company changes their rates. In other words, insureds premiums are going up because theyre purchasing more insurance.”
Home Insurance Premiums Can Increase After Weather
You might see higher homeowners insurance premiums if your claims history shows that your property is in an area that experiences frequent severe weather, or is more likely to in the future.
For instance, since states like Florida and Texas frequently experience severe weather, policyholders in those states face some of the highest costs of home insurance in the country. Insurers have also had to increase prices in parts of California and Canada in response to uncommonly strong wildfires.
As insurers acquire more storm data, it’s safe to say they will continue to reassess their prices after each storm season.
Although filing a single weather-related claim may not necessarily result in a higher premium, understanding how seasonal weather trends could precipitate insurance changes for your community can make you more informed about potential price increases.
Editorial Note: The content of this article is based on the authors opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.
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Is It Worth Making A Home Insurance Claim
Is claiming always going to save you money? Faced with several thousand pounds worth of damage or theft, the case for making a claim on your home insurance is pretty clear cut.
When it comes to costs of lower value, however – where it wouldn’t break the bank to fund repairs or replacements yourself – you might decide making a claim isn’t worth it.
Here are the factors to bear in mind when weighing up whether or not to make a claim:
File A Claim With Your Homeowners Insurance Within 30 Days
Most states require a homeowner to make a claim within 30-60 days. Failure to make a timely claim is reason for claim denial.
When there is a high volume of claims, the earlier you file the paperwork, the sooner you will get your claim processed.
Step 3. Have the Roof Independently Inspected & Document the Damage
Were going to sound a little cynical, but we prefer to think of it as being a wise homeowner.
According to one experienced roofing contractor, Insurance companies heavily scrutinize claims for roof repair and replacement. They will want absolute proof that storm damage is the cause of the roof leak.
To determine this, insurance company will send out its own adjuster someone that works for the insurance company. If the storm damage is widespread, independent inspectors are brought in to handle the load of claims.
However, theyre hired and paid by the insurance company, too. Thats a strong motivation to find results favorable to the insurance company reasons why your claim isnt legitimate and shouldnt be paid.
What reasons might they find? Common reasons for denying a roofing insurance claim are:
In all of these scenarios, the result is the same: Claim denied!
This is where an inspection from a roofing contractor that you are paying is essential.
What a roofer should document for you:
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Filing A Claim Can Raise Home Insurance Rates By About 10%
Typically, filing a single home insurance claim will raise your premiums.
As reported by CNN, monthly premiums rise by an average of 9% after a single claim on your home insurance policy.
If you make a second claim on your home insurance policy within a certain period of time say, 7 years then home insurance rates will almost certainly rise even further. With a second claim, your premiums will typically rise by an average of 20%.
How Much Does Your Homeowners Insurance Go Up After A Claim
It all depends on the type of homeowners insurance claim you’re filing. In general, youâre likely looking at a 7% to 10% increase on average for a first claim, according to Fabio Faschi, former Property and Casualty Lead at Policygenius.
That means if your annual premium is $1,000, you could expect as much as a $100 increase after that first claim. But again, itâll depend on the claim type and payout.
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Home Insurance And Hail Damage: Cosmetic Damage Sometimes Not Covered
Make sure to review your policy to see if wind/hail damage is excluded in your policy. If its excluded, you may want to explore a separate wind insurance policy, which is usually a state insurance program.
For instance, the Texas Windstorm Insurance Association sells polices that provide wind and hail coverage when insurance companies exclude it from homeowners policies sold to coastal residents. The average premium on a TWIA policy is approximately $1,600. The annual average cost for windstorm insurance in coastal Florida is about $2,600.
Insurers also decided to use a “cosmetic damage Exclusion” for homeowners insurance policies. The purpose, experts say, is to limit insurers’ losses when severe weather results in many expensive damage claims.
“This was a reaction by insurers to deal with the increasing volatility of weather events, which are causing havoc with insurers’ loss ratios,” says Robert Prahl, a finance author and former insurance claims adjuster in New York.
Insurance companies now have the option to exclude payments for damage to exterior surfaces, including walls, roofs, doors and windows from hail or wind if the storm impacts the appearance but not the function of these elements. Insurers say the exclusions are necessary to avoid raising insurance premiums to all homeowners.
Some companies may automatically require the exclusion, while others may offer it on a case-by-case basis, according to the American Association of Insurance Services .
Careful What You Say When You Call Your Insurer
Imagine how mad youd be if your premium went up because you called to talk about a claim you were thinking about filing but didnt file. Suppose, for example, I called my insurance company to talk about that tree limb that fell on my house and said I might be filing a claim, but only if the damage is more than my deductible.
If the insurance companys customer service representative hears me use the word claim, she might open a claim and put that tree damage information in my permanent insurance track record. That could happen even if I opted not to file the claim. Then, I wouldnt get the claim payment and I might still have my premium rise the next year.
But wait, it gets worse. Claims filed by the people who lived in your house before you did can also cause your premiums to rise. Thats because your CLUE report includes claims filed by anyone who lived at your address for the past five to seven years. So maybe you only filed one claim, but if the prior owner filed two homeowners insurance claims, your insurance premium is underwritten as though you filed all three claims.
You know what else can make your homeowners insurance premiums rise? Having neighbors who file claims. Insurance companies create rates by ZIP code, points out Amy Bach, executive director of United Policyholders, a consumer advocacy group.
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One Home Insurance Claim Can Cause Your Premium To Jump By 32%
A new study finds that filing a single claim on your home insurance policy could result in a hefty rate increase.
For the second year in a row, insuranceQuotes.com commissioned a Quadrant Information Services study that examined the average economic impact of filing a single claim on your homeowners insurance policy.
However, these increases are going to depend on many factors, including where you live and what type of claim you file.
Inquire About Other Discounts
Most insurance companies provide additional alternative options to reduce your premium, which can net substantial savings. For example, American Family offers discounts when you purchase a newly constructed home and when you replace electrical, heating and plumbing systems in older homes. Some insurers also offer discounts when you pay your premium in full, set up automatic payments or opt for paperless billing.
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Find A Reputable Roofing Contractor
If you didnt do this as part of the step above, now is the time.
Your best ally in a fight over roof repair will be a licensed roofing contractor, not an attorney. Make sure they have:
- A stellar reputation
- Experience dealing with insurance claims
A good roofer will help with the next few steps before repairing the roof.
Prevent Further Damage!
Most homeowners policies require you to cover the damaged roof immediately.
Did you know?Claims for secondary damage are usually denied when the necessary steps have not been taken to protect the roof.
Heres a common and unfortunate scenario:
Storm 1 blows a bunch of shingles off a roof.
Storm 2, a week later, brings wind-driven rain that gets into the unprotected home and destroys everything it touches ceilings, walls, flooring, electronics and more. This is why many homes must be gutted or demolished after hurricanes.
Bad storms damage hundreds or thousands of homes in their path. This makes it impossible for roofers to make quick repairs.
Instead, your roofing company will get the damaged areas tarped and secured to protect your home and your wallet. Once this is done, the roof should be OK until repairs can be made.
