Homeowners Insurance Rates Are Rising. What Does That Mean for You?

For many, the most immediate effects of rising homeowners rates will be on their primary residence. If you are facing rising rates (or your location suggests you might in the future), several strategies can help manage costs while keeping you well protected.

Start by taking a fresh look at your current insurance policy. Review your coverage to make sure it aligns with your actual needs. Remember that being under-insured can also expose you to risk. If standard policies no longer cover certain events, look at whether umbrella policies or supplemental coverage might be able to fill the gaps. Homeowners policies often do not cover flooding or earthquakes, for example. If you live in an area prone to these events, you may need separate policies for adequate insurance. Once you are sure you are not over or under-insured, you can do some comparison shopping to see whether other providers offer better rates for equivalent protection. An insurance agent can be a big help in this area, pointing you toward policies with coverage you need at competitive rates.

Aside from shopping for cheaper coverage, one way to lower premiums is by increasing your deductible. Doing so means you are taking on more of the risk of loss yourself. But pairing a higher deductible with a dedicated savings plan for insurance-related expenses may help you managed increased costs.

If you have plans to relocate in retirement, you may also want to factor insurance costs into that decision. For instance, while Florida has long attracted retirees with its favorable taxes and relatively low cost of living, homeowners are facing more challenges finding (and affording) insurance.