Historic inflation and more severe weather patterns have resulted in spikes in the number and severity of homeowners claims, and the costs associated with resolving them. In response, insurance carriers throughout the industry are making important updates to keep coverage affordable and accessible.
Homeowners have a significant role to play in this effort. There are three ways you can start to make a difference. The first is by increasing your deductibles, meaning you’d pay more out of pocket if there is a loss, but your rate may be more affordable. The second is through home maintenance, which helps reduce your risk of experiencing a loss. Finally, installing protection devices that detect or potentially prevent losses in your home will prevent or mitigate losses that could raise your premium and disrupt your life.
Inflation: What Do You Need to Know?
Inflation may be leveling off, but costs have increased significantly over the past few years. When we compare current costs to those in 2019, the numbers are telling:
- Interiors: Up by 57 percent.
- Lumber: Up by 52 percent.
- Roofing: Up by 36 percent.
- Drywall: Up by 33 percent.
- Labor: Up by 13 percent.
These figures indicate a significant upward trend in construction and repair costs, which directly impacts homeowners insurance.
Weather Events: How Are You Impacted?
As weather patterns continue to worsen, claims are becoming more frequent, more severe and more costly. In 2022, the United States witnessed 18 separate billion-dollar weather and climate disaster events. Through August 2023, there were already 23 such events.
Reasons to Raise Your Deductible
For a long time, a common deductible on a homeowners’ policy was $500 or $1,000. This is the same as the standard deductible on an auto policy – despite the fact that a home is typically 10 to 12 times the value of a car. As claims costs and severity continue to rise, homeowners should consider raising their deductibles from their standard amount. Keep in mind that many homeowners may not experience a loss. This is why higher deductibles are becoming more common, and why they are a way to reduce the impact of rate increases and keep coverage affordable.
Home Maintenance: What Steps Can You Take?
Deductibles are only something you pay if you have a claim. So, why not take steps to avoid the disruption and stress that come with experiencing loss? Through regular home maintenance and loss prevention practices, you can greatly reduce your risk of having a claim – and lessen its impact if you do have one.
Staying on Top of Roof Maintenance
Your roof is your home’s first line of defense against bad weather. With the frequency and severity of roofing claims soaring, roofing coverage is beginning to adopt an approach more similar to auto coverage. This largely impacts older roofs, which are especially susceptible to damage from weather events. That’s why it’s important to maintain your roof, no matter how old it is, by trimming overhanging branches, replacing shingles, sealing holes, and keeping gutters clear to mitigate ice dams.
The Importance of Monitoring Devices
One of the most common claims is water damage unrelated to weather. Think of damage caused by failing appliances or leaky pipes. But this is largely preventable through water sensor and shut-off technology. Another increasingly common claim is electrical fires, which is why devices that monitor electrical activity in walls and temperature sensors are also becoming more widely used. Both of these trends speak to the importance of installing safety technology in your home to prevent avoidable, disruptive losses.
Access Valuable Resources
Educators Insurance Agency is available to help you evaluate your homeowners coverage, to keep your home safe and your policy up to date. Visit www.educatorsinsuranceagency.com or call 888.908.6822 to speak with an agent.
This article previously was featured on www.hanover.com.
