Should my homeowners insurance premium increase from year to year?
I live in Illinois. My insurance premium for my house went from $720 to $860 for a year. Is that typical??
Yes. Your looking at any increased risks,(example, The state of florida and all of our hurricanes!) And also, the cost to rebuild is going up all the time. Some policies even increase your coverage (Automatic inflation guard) to help keep you from being under insured. However, you might be able to find something remotly cheaper with another company.
It all depends on the number of claims paid out in your particular state or area. A minor % increase should be acceptable. This increass you reference above for example is 19.4% year-over-year. Seems high? Not sure? You may want to consider shopping around for a FREE quote on the same amount of insurance with another carrier. If you are an AAA Club member try to get a quote from them? Also contact "The Travelers" they are pretty good for auto and home owners insurance premiums. Remember you home is an ASSET which is appreciating yearly and you definetly want to cover your major asset. Some Insurance Companies give you a discount if you maintain BOTH you auto and home insured with them (i.e. The Travelers). Try Geico? This research will give you new knowledge and a better perspective as to the value of your homeowners insurance coverages in the land of Lincoln (IL). GOOD LUCK! :-)
Answers:
i usually shop around every two years. the increase is probably normal but it pays to make a few calls. try 21st century. it was much cheaper for me than the major companies
Call your agent and ask them. It does not seem like a typical amount for an increase but it could have been a rate increase due to claims in your area. Your agent will be able to tell you why there was such a large rate increase
Yes. For several reasons - the cost to rebuild your house - aka policy limit - is ALSO going up every year. Even if there's no rate increase, you're getting COVERAGE increase.
Also, after a particularly bad year, like 2001 or 2005, companies are going to take GENERAL rate hikes.
Plus, your house is getting older - which makes it a higher risk. WHICH REMINDS ME. If your house has had the roof replaced, plumbing upgraded, furnace/ac replaced, or wiring updated, be sure to tell your agent. For houses over 25 years old, there's a "renovation credit" if all four systems have been renovated in the past 15 years.
The cost of rebuilding goes up every year; normally this is like a 5% increase to one's policy. Perhaps there was a rate revision, which affects different people differently. Time to shop your policy. Raising deductibles can help your rate. Combining your auto and home for a multi-policy discount usually helps too. Go to an independent agent with lots of comapnies and have them shop it. GEICO doesn't do homes, and anyone selling GEICO can't sell any other company.
Cost of doing business.
I just raised my deductibles and saved a lot.
Homeowners insurance is based on two things - the value of the home being insured, and the risk of a claim. Home values usually rise, but the risk of claims rises and falls. It is possible for a homeowners policy premium to fall, if home values are constant and risk declines, but, most often, risk stays constant and value rises, so premiums usually go up.
Incidentally, insurance is a state-regulated business in most states, so premiums are not set at whatever the traffic will bear, but at whatever the state agency in charge will permit.