Every home owner is concerned about increasing home insurance rates, but it is sometimes difficult to understand exactly what it is that would cause your home insurance rates to increase. Of course, one of the main reasons rates increase is because insurance companies regularly increase their premiums. Although this may not be very popular with homeowners in general, it is to be expected, of course. But there are also other reasons why your home insurance rates may increase, aside from the regular rate increases that insurers make.
Homeowner Makes Too Many Claims: It is difficult to say exactly how many claims would be construed as being too many as that depends entirely on the insurer, however more than two claims in four years would likely cause your insurer to increase your home insurance rates.
Claims Made Due to Your Deficiency or Lack of Action: If you fail to take care of something in your house and later damage occurs to your home because of this, you will most likely see an increase in your insurance rates. A typical example of this would be if your roofing was damaged by a heavy hail storm, you failed to repair it and then your home was damaged by a leaking roof. If you made a claim for that and the insurer determined that the fault was yours, your rates would probably increase. Or, if you failed to take care of a termite problem and then a part of your house collapsed, you would also most likely see an increase in your home insurance rates.
Large Claims Made: If your house burned down or was destroyed by flooding, and you made a claim you may find future home insurance rates increasing. This is also dependant on the circumstances surrounding your claim though. If, due to your negligence your house burned down you can be pretty sure that your rates would increase. But if something happened to your home that was outside of your control, perhaps it was burned down because of an electrical wiring problem that started a fire, and then you may find that there is only a marginal increase in your rates.
Natural Disasters Cause Huge Claims on Insurers: In the event of any natural disaster where multiple home owners’ houses are destroyed, either totally or in part, such as in the wake of a hurricane, or tornado, you should expect home insurance rates to increase. If Insurance agencies take a wide scale hit, which they do when a catastrophe happens, they have to pay out tremendous amounts of money to homeowners. Their own capital reserves are depleted, and thus in order to both replenish their own reserves and build up more money for future claims they have to increase their home insurance rates to homeowners in their area. There’s really little else they can do if they want to stay in business and provide homeowners with future protection and financial recompense.
Source by Kate Swann
