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Rising Homeowners Insurance Costs & Tips to Lower Them

In recent years, home insurance rates across the U.S. have risen faster than wages and the cumulative inflation rate. For instance, between 2017 and 2020 alone, the annual home insurance premiums increased by 11.4% on average, outpacing the rate of inflation by 3.5%. Since then, the gap has grown wider and experts expect the trend to continue in the near future. Read on to learn why the home insurance rates are rising at an unprecedented rate, as well as tips to get cheaper homeowners insurance in Fresno, CA.

Reasons for the Rising Cost of Homeowners Insurance

The average cost of homeowners insurance premiums currently stands at $1,445 per year. Just five years ago, this figure was below $1,200. Other than the COVID-fueled inflation, homeowners policies are continually becoming expensive due to the following reasons:

  • Shortage of building materials

    Natural disasters have destroyed a lot of vegetation, leading to a shortage of building materials in the U.S. To give you an idea, in 2020, wildfires destroyed 10.1 million acres of land across the U.S. Forty percent of the burned land is located in California. Due to this, builders are now experiencing an acute shortage of building materials and are increasingly turning to alternative construction materials. The materials shortage has also led to an increase in the cost of rebuilding damaged houses, and hence, the increased cost of homeowners insurance.

  • Increased cost of dwelling coverage

    Due to the high cost of repair and rebuilding of destroyed structures, the cost of dwelling coverage has also gone up significantly, impacting the overall cost of homeowners policies.

Tips to Lower Home Insurance Premiums

The cost of homeowners insurance varies based on factors such as location, size of the deductible, home value, cost of rebuilding, size of risk, state, insurance provider, credit history, and size of coverage, among others. Regardless of the rising cost of this coverage, you can lower it if you do the following:

  • Raise your deductible

    A higher deductible translates to lower insurance premiums.

  • Bundle with auto insurance

    Some insurance companies typically offer bundling discounts if you purchase more than one insurance policy from them. Therefore, you can lower your home insurance premiums by simply bundling your home and auto insurance policies.

  • Mitigate risks

    The cost of insurance is directly proportional to the size of the risk at hand. For instance, living in a high-risk home increases your chances of filing a claim, which attracts higher premiums. Thankfully, you can mitigate different risks and lower your costs. Risk mitigation measures include:

    1. Installing a burglar alarm, motion detectors, and security cameras to curb break-ins
    2. Revamping your drainage system to prevent flood damage
    3. Installing shutters to prevent storm damage
    4. Installing fire detectors to prevent fire damage
  • Relocate to a safer zone

    If you live in a high-risk area, say, a crime-prone location, you may want to move to a safer area to lower your home insurance costs. Take note that regardless of the risk at hand, the cost of living is typically lower in some locations, and this means you may likely pay less for home insurance if you move to such areas.

  • Maintain a good credit history

    Insurance companies usually consider those with a poor credit history as high-risk. As such, strive to maintain a good credit history and a high credit score to get lower home insurance premiums.

How McCarty Insurance Can Help

Instead of spending hours scouring the internet for “affordable homeowners insurance near me,” contact McCarty Insurance to get started on your tailored coverage. We can help you understand the ins and outs of your chosen policy.

Our approach is unique. See how we can help you!  Contact Us