Common reasons your premium went up
- Rebuild costs: materials and labor have gotten more expensive, so it costs more to repair or rebuild a home.
- Weather and regional losses: when an area sees more storm, hail, wind or water claims, carriers may raise rates for homes there.
- Your own claims: a recent claim can raise your premium or affect discounts.
- Coverage changes: your dwelling limit may have gone up automatically.
- Discount changes: a discount may have ended, or your bundle changed.
- Carrier changes: carriers adjust rates and underwriting rules over time, with approval as required by your state.
Inflation protection, explained
Many policies include an inflation feature that raises your dwelling limit at each renewal. It helps keep your coverage in line with the cost to rebuild. A higher limit usually means a higher premium.
Hypothetical example: a 5% increase on a $400,000 dwelling limit adds $20,000 of coverage. That extra coverage is part of why the renewal costs more.
Why underinsuring isn't the answer
Lowering your dwelling limit below the cost to rebuild can save money now but leave you short after a major loss. Your lender also requires the home to be insured. Look at deductibles and discounts before cutting coverage.
How it affects your mortgage payment
If your insurance is paid through escrow, your servicer pays the new premium from your escrow account. At the yearly escrow review, your monthly payment may go up to cover it. If the account came up short, you may also owe the difference or have it spread over the next year.
Your principal and interest don't change on a fixed-rate loan. Only the escrow part does.
What you can do at renewal
Start a few weeks before your renewal date, so you have time to compare.
- Read your renewal notice. Check what changed in coverage, deductible and price.
- Ask about discounts, such as bundling home and auto, security systems, or a newer roof.
- Consider a higher deductible if you have savings to cover it.
- Ask whether your dwelling limit still matches the cost to rebuild.
- Compare quotes from other carriers.
If your carrier won't renew
Carriers can choose not to renew a policy, usually with advance notice. Notice rules vary by state. If you get a non-renewal notice, start shopping right away. A lapse in coverage can cause problems with your mortgage, and your lender may place its own coverage, which often costs more.
How CapCenter's insurance agency helps
Our in-house agency compares coverage across multiple carriers. We review your policy each renewal to make sure you are not paying too much for your insurance.
