You just received your homeowners’ insurance renewal from your insurance carrier. If the first two thoughts to pass between your ears are; I didn’t have any claims, and there weren’t a lot of bad storms in our area this year; you are not alone! Homeowners’ insurance premiums in Kansas and Missouri are on the rise. Instead of bothering you with the corporate hogwash that all agents are force fed, we will focus on what you can do to stem the tide of out of control premiums.
First, analyze your deductible. The higher the deductible you can reasonably afford to pay, the lower annual premium you will pay. Most people go years even decades without a homeowners claim. Imagine the savings that has been wasted by not increasing the deductible. If you have a $1,000 deductible and a pipe burst causes $1300 in damage are you going to file the claim? If you do you will receive the $300 from your insurance carrier, and most likely an increase in premium which will remain in effect for 3-5 years. Who is really paying for the $300 claim? Now imagine a wind and hail storm damages your roof. (I know this is hard to do for you Missouri and Kansas homeowners) You most likely can’t afford to not file this claim, and as a result will show two claims in a short period of time. This is considered high claim activity and will most definitely be accompanied by a sizeable increase to your home insurance premium. Still want to file the $300 claim? When considering whether to file a claim, remember this rule of thumb. “Pay for what you can, and file claims for what you can’t.” Many companies are raising their minimum deductible that is allowed. I suggest going even higher and pocketing the savings for a rainy day!
Second, ask your agent to run an updated reconstruction cost estimate. If you have been with the same company for a number of years, they ran a reconstruction cost estimate when you first purchased the policy. In the subsequent years they have just increased the amount of coverage based on forecasted market conditions. Very often this can save homeowners between $50 and $100 in annual premium. Doesn’t sound like much? Consider that all future increases are based on this amount and compounded annually. For example, let us assume a 20% increase. That $100 will now be $120, and next years increased will be based on the $120. Keeping the homeowners insurance premium as low as possible is very important to acceptable future premiums.
Third, work to improve your credit score, and if you know your credit standing has improved talk with your agent about getting a new quote from your carrier along with other carriers. Credit scores are very fluid. I have had premiums drop or raise as much as $250 within a short period of time due to changes in a credit score. Married? Have the agent use the spouse with the better credit score for the quote. Obviously keep quiet if your credit has slipped at all!
Fourth, let your agent know if you have upgraded your home in any of the following ways; new roof, new HVAC, updated wiring, updated plumbing, or a change in exterior wall construction materials. This will also include checking for upgrades to your local fire department if you live in a smaller community. All of these upgrades can have a significant effect on homeowner insurance premiums.
Finally, shop your insurance every couple years. Very seldom will you find a carrier has the best rates for your home insurance for more than a couple years. Your personal circumstances are changing all the time. All carriers have different factors they like in an ideal customer. Age, zip codes, age of home, age of roof, credit score, claim history, state of residence, construction materials of home, and others affect the premium with a given carrier. The significance given to a particular factor by a carrier is ever changing as well. Shopping every couple years helps insure that you will find the carrier that offers you the best rates, based on these factors. So don’t just complain about your increased premium, do something about it!
DBR Insurance, LLC is a Kansas, Missouri, & Arkansas Licensed insurance agency. For all your insurance needs contact DBR at (913) 871-3606.
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