Obtaining guidance from home insurance agents can be immensely helpful for homeowners grappling with escalating rates.
In 2022, homeowners insurance premiums witnessed an average increase of 12.1%, as reported by Policygenius. This surge reflects the current state of the homeowners market, which is influenced by factors such as high inflation, severe weather events, and labor shortages. These circumstances have even led to carrier withdrawals, exemplified by State Farm’s departure from the California homeowners and commercial property markets.
Paul Gallagher, Senior Vice President at NFP, acknowledges that the industry is currently in a hard market, characterized by an overall upward trend in premiums. This persistent hard market, which has lasted for three to four years, shows no clear signs of abating.
While uncontrollable factors like inflation, weather events, and supply chain disruptions impact rates, homeowners still retain control over when to file a claim. SafeHome.org’s 2023 report emphasizes the consequences of filing homeowners insurance claims. Analyzing over 1,400 homeowner policies, the report discovered that those who filed claims subsequently paid an average of nearly $400 more in premiums per year compared to those who refrained from filing. The average claim amount was $20,700.
Filing a claim against a homeowners policy can be a complex and costly affair. However, homeowners can significantly reduce the financial burden on their premiums by heeding advice from agents and avoiding common claim mistakes.
According to Gallagher, the first mistake is filing a claim with the insurance company before consulting one’s agent or broker. He emphasizes the importance of having a conversation with the agent or broker prior to initiating a claim, as most claims can wait for this discussion. During this conversation, the pros and cons of opening a claim can be thoroughly evaluated.
Homeowners should exercise caution when considering filing a claim for damages caused by insufficient home maintenance. For instance, if a claim is made for deteriorating house siding and subsequently denied, it still becomes part of the Comprehensive Loss Underwriting Exchange (CLUE), which can affect the homeowners’ premium.
Homeowners nationwide are grappling with increasing premiums, regardless of their scale. However, agents possess strategies to help clients save on premiums. By offering policies with higher deductibles, agents enable clients to retain a portion of the risk if they can afford it.
As an independent agency, ALINK Insurance Services® provides many choices for home insurance and auto insurance. Our access to multiple companies increases the opportunity of finding better home and auto insurance value by blending the desired mix of pricing, coverage, and service to meet the unique needs of consumers.
