Branch Owner, TWFG Insurance Services, Fremont California and the Greater Bay Area Representing Dozens of Insurance Carriers
There are several factors that can increase premium in a homeowners insurance policy. One could be the cost of construction. Since the home must be insured with enough dwelling coverage to cover the home in a total loss you my see an increase in dwelling coverage thereby an increase in premium. Also age of the home can be a factor. In brand new homes most insurance carriers give big discounts for up to 10 years. As the home ages the discount diminishes until gone. Generally all other factors aside the home can remain in a stable position until the home becomes around 30 yrs old which can at that time start increasing premium do to the risk increasing. Another factor is just a rate change by the carrier mostly due to high losses in any given area. And of course your claims history is a factor.
Agency Owner, The Thomas G Sheehan Agency, 27 Glen Road Sandy Hook, CT 06482
In general, Homeowners Insurance premiums, like all insurance premiums, reflect the amount of risk that the insurance company has determined there to be and their loss and cost experience with these risks. There are many factors that are included in rate development within the above mentioned categories. A couple of examples can be the home's location in relation to a fire department and hydrant. Homeowners policies, for the most part, include some form of an "inflation guard" provision meaning that the dwelling amount will be adjusted each renewal to reflect increased costs due to inflation. Substantial renovations on a home can markedly increase the replacement value of that home and as the dwelling amount increases, so too would the proportional premium.
Talk to your insurance professional about your deductible options as well as any discount opportunities in order to manage any increases.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
Most homeowner’s policies come with a provision to increase coverage every year. This is an attempt to keep pace with increased cost of construction. The point is to have adequate coverage to replace the home in the event of a covered loss. Occasionally companies will take a general increase if their losses exceed their revenues. These rate increases usually require approval from your state insurance commissioner.
Chief Executive Officer, Coastal Homeowners Insurance Solutions, Rocky Point, NY 11778
There are several reasons why a homeowners insurance policy can increase in price and coverage. Here are some of the most common. Most policies come with an "inflation guard" that will raise the dwelling amount by a predetermined percentage every year. This can cause an increase in premium. The insurance company may have filed for a rate increase with the state. You may have received a "new home buyer" credit that is decreasing as the policy ages. You may have received a "new home discount" that may be getting reduced as the home ages. You may have lowered your deductible or made changes to the policy. You may have lost a discount for a central station alarm. The company may have done an inspection on the property that determined it needs to increase the cost to rebuild the home. There's many reason but these are some of the top ones I've come across. Hope this answer helps.
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Talk to your insurance professional about your deductible options as well as any discount opportunities in order to manage any increases.