Every homeowner needs homeowner’s insurance and lately all I hear is my premium is going up! So what’s going on?
Mortgage lenders require homeowner’s insurance before you can close. The main reason is you are taking out a loan on a valuable asset and if something happens to it, you need insurance to cover the value. This past year, insurance premiums have jumped especially in certain states. Minnesota is one of them due to the number of claims in the past year. There was a report by digital insurance agency Matic that showed in 2018 the average insurance premium was $1142. By the first half of 2023, that jumped to $1472. Since 2020, the premiums have been raising quickly. They climbed an average of 5.03% between 2020 and 2021.
Why are the costs going up so much? The number of natural disaster has increased. FEMA declared 49 major disasters in the first eight months of 2023. The cost of repairs is also going up. Everything combined has caused insurance premiums to jump.
The other issue is getting insurance. I have talked with a few independent brokers and more and more insurance companies are watching where they will insure homes. In Minnesota, it’s more common to need to combine your home and car to get a new policy. They are using overhead pictures to look for trees that are hanging over your roof. There are some companies that are not insuring new policies in certain states.
A couple tips for you when shopping insurance. Make an inventory of your belongings – note the age of your roof, take pictures of higher valued items. Then if you have a loss, you will want to take more pictures to document the damage to your property. Don’t throw anything away until the insurance adjuster has come out to view your property.
When you shop around for insurance, make sure you are comparing the coverages. You want to make sure you have enough coverage. If you don’t have the right coverage, you could face a large financial disaster!