Why Are Replacement Cost Increases Driving Up Home Insurance Premiums?
You aren’t alone if you’ve noticed that your home insurance premiums are rising. Several factors are driving up home insurance premiums. Supply chain disruptions, inflation and sharp increases in the costs of building materials are important factors causing insurance companies to adjust premiums.
Your agent can help you understand the reasons behind your home insurance premiums increases. They can also provide you with information about how to lower your premiums. Contact Choice One Insurance in Cutler Bay, Florida, today to ensure you have adequate coverage and discuss ways to potentially cut your insurance costs.
Demand for Supplies and Rising Labor Costs May Cause Premium Increases
Your home insurance coverage limits affect premium prices. Your home insurance policy includes a dwelling limit that determines how much your insurer will pay to replace your home if it were destroyed in a covered event.
When your home insurance policy is renewed, the insurer may adjust the dwelling limit to account for inflation. Since the costs of labor and materials are on the rise, so is the cost of rebuilding a home.
During a typical year, it’s common for homeowners to experience a rate increase of 2 to 3%. Increased storm activity along the coasts directly impacts insurance rates, and homeowners in south Florida and Miami are feeling the effects of this increase.
In the past year, building material prices have increased 19%, and inflation levels are at a 13-year high. Insurance companies must reflect these increases when they adjust your home's dwelling coverage to increase your chances of having adequate coverage if your home were a total loss.
Homes in areas prone to storm and wind damage may be more expensive to insure. Building and labor costs may spike after a major storm that affects your entire community, making rebuilding even more costly.
Your Agent Can Help You Identify Ways to Save Money on Insurance
No one enjoys seeing an insurance premium increase, but as home insurance prices rise all over the country, it's more important than ever to review your current coverage. Your agent can help identify opportunities to lower your insurance costs without sacrificing coverage.
You may be eligible for multi-policy discounts. Making specific improvements to your home may also help reduce your insurance costs.
Contact Choice One Insurance today to talk with an agent about your home insurance costs.
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