Is Your Home Insurance Coming Up For Renewal?

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June 15, 2021

Is Your Home Insurance Coming Up For Renewal?

As a homeowner, you may have noticed that time seems to pass by more quickly each year. Before you know it, you’ve lived in your new house for 12 months. Is it already time to renew your home insurance?

The policy you purchased when you first moved in may no longer meet your needs. Take this opportunity to reassess your coverage and determine if it’s still right for you.

Have you ever wondered how home insurance is calculated? It’s based on a few factors, which include: 

  • The location of your home
  • If your home is in good condition or if it needs repairs
  • Your insurance policy

As time passes, your circumstances will often change. If your insurance policy is up for renewal, you might be wondering if you can secure a lower rate—especially if you’ve dealt with increases in recent years.

That being said, the last thing you want is to under-insure your home. Doing so will put you at risk of financial loss if you deal with a flood, fire, or burglar. 

Now that it’s renewal time, you can change your policy without paying cancellation fees. Here are a few things to consider when shopping for home insurance:

Why Home Insurance Rates Rise

When you’re reviewing your annual costs for insurance, you may notice that the costs have increased. Why is that? Here are a few potential reasons for it:

Volatile weather conditions

The more likely that accidents are to happen, the more your insurance policy will cost. When it comes to weather conditions, rate increases may be entirely out of your control.

If you live in an area that deals with frequent floods, wildfires, or other extreme weather events, your rates may increase to reflect that. Those who live in high-risk areas can expect to pay higher home insurance premiums.

You’ve renovated your home

The insurance policy you choose is based on the value of your home—if your home increases in value, that rate will rise accordingly. 

The same policy that covered a $250,000 home won’t be enough for one that’s now valued at $400,000. With high-end fixtures, materials, and appliances, replacement costs will be higher if an accident occurs.

The house is getting older

We know that as we age, our bodies are more prone to health issues; the same can be said for the homes we reside in. Older buildings are more costly to insure since they’re more likely to require roof repairs or deal with flooding issues. 

You’ve filed one or multiple insurance claims

Each time you file a home insurance claim, your premiums and rates increase. 

We suggest that you hold off on filing claims unless it’s absolutely necessary. If you do so too often, it may end up being more expensive. Ask yourself this: is it worth it to file a claim for the small leak in your roof, or should you hold off until something major happens?

Ways to Lower Your Home Insurance Rates

Want a less expensive home insurance policy that can still meet your needs? Offset increases by investing in these upgrades, which can create savings on your coverage rates:

Pay off your mortgage

By paying off your mortgage, you’ll enjoy significant savings on your premiums. This might be years away for many first time homebuyers, but it’s a good thing to have on your horizon. 

Is mortgage life insurance mandatory when purchasing a home? This coverage is intended for the lender—it protects them if you’re unable to pay your mortgage. 

The answer depends on how big of a down payment you can put on the home. If that amount covers 20% or more of the purchase price, you may not need to pay for mortgage insurance. However, if you have less than that, you might be required to pay it.

Install a security system

An alarm and monitoring system protects more than your home—it also benefits your insurance provider by reducing security risks. As such, many policies offer discounts for homes with security systems as an incentive for homeowners. 

Protect your home against flooding

Installing a sump pump in your basement can lower your insurance rates. That’s because these devices reduce the risk of a flood and the risk that you’ll file a claim. Bolstering your home’s defences is a great way to lower insurance costs.

We recommend that you compare your current home insurance rate to other options each time your policy is up for renewal. 

Need help finding a home insurance policy that fits your needs? Check out Insurance Jack! Send us an email today, and we’ll be happy to answer any questions you might have. 

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