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HOME INSURANCE RATES INCREASE IN CALIFORNIA

HOME INSURANCE RATES INCREASE IN CALIFORNIA

HOME INSURANCE RATES INCREASE IN CALIFORNIA

Affordability is among the most important factors that many homeowners consider when purchasing a home insurance policy in Califonia. However, insurance rates are usually adjusted depending on the changes to a policyholder’s risk landscape.

Various external and personal circumstances can affect the cost of your homeowners insurance premium. According to reports, the average premium for home insurance increased by 59% over the last decade.

Importance of Home Insurance

With increasing rates, many homeowners may consider not getting insurance anymore. Some may even think of it as an unnecessary expense. But that is far from the truth.

For a lot of people, their home is one of the most valuable possessions that they have. You may have even saved for years for it.

Additionally, it contains many important belongings. So, it only makes sense for you to ensure that it is fully secured. With proper coverage, you can protect yourself against huge expenses for certain damages. 

Reasons Why Home Insurance Rates Go Up

As stated earlier, your insurance provider considers various factors when determining how much your premium would be. If there are any changes in your risk landscape, then your home insurance policy rate is likely to change as well.

Here are some of the most common causes of rate increase:

  • Claims History – No matter how small or big it may be, claims will stay on your policy records for a few years. For instance, claims filed due to natural disasters may not cause as much increase as those from non-catastrophic incidents like water damage, house fire, liability, and theft.
  • Inflation – Some causes are out of your control. One of these is inflation. Insurance providers may adjust insurance rates if the coverage limits are changed due to inflation. Generally, you are likely to get higher rates if the cost to rebuild your home is higher. 
  • Loss of Discounts– Always read through your policy even if it is just for renewal. Check if you qualify for any discounts that your insurance provider has not applied. 
  • Additional Features– Did you buy a trampoline, built a treehouse, installed a swing set, or added a swimming pool to your property? If the answer is yes, then that will cause an increase in your insurance rates.
  • Home Improvements – Big improvements will increase the value of your property. It makes it more expensive to rebuild your home. Examples of enhancements that can affect your insurance premium are bathroom or kitchen renovation and upgrade to expensive customized cabinets.
  • Outdated HVAC, Plumbing, or Electrical System – Outdated systems increase the risks of unexpected incidents in your home. Thus, your insurance provider may opt to charge higher rates.
  • Old Roof – Similarly, an old roof may cause higher insurance rates. That is because it is more likely to experience damage during severe weather conditions. It is also more prone to suffer from leaks.

Preparing Yourself

The cost of a home insurance policy can be high. If you value affordability, you should be aware of the factors that may cause your rates to increase. Doing this will help you save up and prepare. If you need help in buying homeowners insurance or guidance to better understand how and where to start, contact us at Panorama.

 
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