How to Get More Affordable Home Insurance as Costs Soar (2024)


Continue reading the main story

Supported by

Continue reading the main story

Your Money

Weather-driven disasters are causing rates to skyrocket in high-risk regions. But there are things owners can do to save on costs.

  • 98

How to Get More Affordable Home Insurance as Costs Soar (1)

By Tara Siegel Bernard

As the 2018 West Fire swept through Alpine, Calif., a small town in the foothills east of San Diego, firefighters were stationed in front of Emily Ziegler’s house, where she lives with her husband and three children.

The fire claimed dozens of homes in its path, but the family’s house — which includes a garage and a granny flat on more than two acres near Cleveland National Forest — was unscathed.

Securing affordable homeowners’ insurance, however, has become a challenge. The family’s policy with USAA doubled to $8,000 last year, and when Ms. Ziegler called other insurers in search of a better deal, they all gave her the same advice: Hold on tightly to your existing policy.

“There is a limited number of people who will write insurance in our area, and they will only write it for a limited number of homes,” said Ms. Ziegler, 44, a forensic psychologist. “I don’t have any other options.”

Options continue to shrink for homeowners living in California and other catastrophe-prone states, including Louisiana and Florida. Just last month, State Farm, the largest insurer in California, said it would stop writing new homeowners’ policies there, citing the rising cost of rebuilding, increased exposure to catastrophes like wildfires and the escalating expense of the insurance it buys for itself to offload some financial risk. It joined retreats by Allstate, California’s fourth-largest insurer, and AIG last year and Nationwide before that.

“The new normal means paying more attention to insurance than you’d like to or you have been,” said Amy Bach, executive director of United Policyholders, a consumer advocacy group.

Even outside the areas most vulnerable to the increasing frequency and costs of weather-driven disasters, insurance prices are projected to keep climbing: Nationally, premiums rose 12.4 percent in the first quarter, according to S&P Global Market Intelligence, the highest increase in nearly two decades.


When traditional insurance is hard to secure

Finding a reasonably priced policy is an increasingly complex and high-stakes calculation. Standard homeowners’ and renters’ insurance policies don’t cover all hazards. Wildfires are generally folded in, for example, but floods and earthquakes generally require separate coverage. In hurricane-prone areas, wind and hail coverage may carry its own deductible — or be a separate policy.

In fact, homeowners having difficulty securing policies through traditional, state-regulated carriers like State Farm may need to turn elsewhere, even temporarily.

Most states have some type of “last resort” option, though the plans vary in design, cost and coverage. A majority of states have so-called FAIR plans, an acronym for Fair Access to Insurance Requirements, which are established by the state but generally backed by private insurers. They provide basic coverage — at a higher cost, in part because they take on the riskiest customers — and homeowners may need to buy supplemental policies to fill in gaps.

More Californians are expected to continue to turn to their state’s FAIR plan. And in Florida, the FAIR plan became its largest insurer last year, covering more than 15 percent of homeowners at the end of 2022, according to the Insurance Information Institute, a trade group. Colorado passed legislation last month to create its own version, which will insure homeowners up to $750,000.

There are nontraditional options, but they come with fine print of their own: Specialty insurers sell policies in higher-risk areas that are only lightly regulated, and unlike traditional insurers, they are not backed by state guarantees. In other words, if they fail and cannot pay out claims, the homeowner receives nothing. (An insurer’s financial strength can be found through companies like AM Best.) These carriers also don’t need to submit their rate increases for approval with states, as regulated insurers do.

“People are turning to it because it is there, and they are desperate,” said Douglas Heller, director of insurance at the Consumer Federation of America. “But it is important for consumers to know whether the insurer they are signing up for is protected by the state guarantee fund if the insurer goes insolvent.”


Mitigating risk and strengthening your home for disasters

After homeowners figure out the hazards in their area — sites like Risk Factor can help — they can take steps to reduce the potential damage and, hopefully, their insurance premium. You might even call your insurer to find out if your property has a risk score, and ask if there are ways to improve it.

In California, a new law requires insurers to provide homeowners with their property’s wildfire risk score when they apply for a policy, and what they can do to lower it. Last year, the Insurance Institute for Business & Home Safety, a research group, introduced the Wildfire Prepared Home designation, which provides a list of actions that can be taken to “harden,” or fortify, a home against wildfires. After those requirements are met, the group sends an inspector and issues a three-year certificate that may be used for potential insurance discounts. The designation costs $150.

“Insurance companies want to see that mitigation actions have been taken, and oftentimes it is a suite of actions, not just one,” said Roy Wright, chief executive of the institute and a former chief executive of the National Flood Insurance Program.

Mitigation measures for hazards in different parts of the country can reduce premiums 5 to 10 percent, according to the Insurance Information Institute.

Ms. Ziegler and her husband, Louie Garcia, are doing what they can to make their home less vulnerable to wildfires. They have a “defensible space” around most of their house, which is clear of vegetation and other flammable materials, and Mr. Garcia is replacing the wood siding with fiber cement board. They’re also rebuilding their wood deck with fire-resistant materials.

Mitigation costs can vary. Replacing a cedar roof with metal, concrete or asphalt may be pricey, but fire-resistant, mesh-covered vents that prevent embers from getting inside the home, for example, can cost just $50 a piece.

All of these actions are more effective when they’re happening communitywide. Living in what the National Fire Protection Association deems a “Firewise USA” community can help generate insurance discounts.

Other cost-saving strategies

Most people are advised to buy enough insurance to rebuild their home so that it meets building code requirements. Be sure the policy covers the replacement value, not the actual cash value. The high cost of rebuilding is driving much of the premium increases, but there are strategies to try to reduce your premiums.

Many homeowners are resorting to the usual tactics, including raising their deductible or reducing coverage on other structures, such as garages, or their home’s contents and personal property.

Some larger carriers offer deductibles up to $5,000, while specialty insurers may run as high as $10,000, said Pat Howard, a home insurance expert at Policygenius. “Right now choosing a high-deductible policy is probably the most impactful thing they can do to lower their bill.”

But it also means you won’t be able to file claims below that amount, which makes an emergency fund even more important. And in the most disaster-prone regions, including the Gulf Coast states and parts of Long Island, deductibles for wind damage are already sky high, so it’s impractical to raise them further.


How to scour the insurance market

In an online world that’s increasingly eliminating the middleman, this is a situation where a well-seasoned broker can help. “In this market,” Ms. Bach said, “it is very hard for a consumer to shop on their own.”

Some experts suggest scouring the market in a few different ways: Get at least one quote online and one through an agent that sells exclusively through one insurer. Then reach out to an independent broker who has the ability to survey several providers and match you with the best insurer for your situation. Investing time in this exercise every few years (or every year, if you don’t have a traditional policy) can ensure that your coverage is in good shape.

If you’re buying a home, start that search early. In riskier areas, real estate agents are requiring homeowners to find insurance before closing, said Janet Ruiz, an industry expert at the Insurance Information Institute.

Mr. Howard of Policygenius said he’d go as far as building an insurance contingency clause into offers on new homes — that is, if you cannot get insurance or adequate coverage, you can walk away from the deal. “You are going to see that a lot more,” he added.

Tara Siegel Bernard covers personal finance. Before joining The Times in 2008, she was deputy managing editor at FiLife, a personal finance website, and an editor at CNBC. She also worked at Dow Jones and contributed regularly to The Wall Street Journal. @tarasbernard

A version of this article appears in print on , Section


, Page


of the New York edition

with the headline:

How to Save On Coverage In Fire Areas. Order Reprints | Today’s Paper | Subscribe


  • 98


Continue reading the main story

How to Get More Affordable Home Insurance as Costs Soar (2024)


How to Get More Affordable Home Insurance as Costs Soar? ›

Raise your deductible

The higher your deductible, the more money you can save on your premiums. Nowadays, most insurance companies recommend a deductible of at least $500. If you can afford to raise your deductible to $1,000, you may save as much as 25 percent.

What is one way to reduce the cost of a homeowners insurance policy? ›

Raise your deductible

The higher your deductible, the more money you can save on your premiums. Nowadays, most insurance companies recommend a deductible of at least $500. If you can afford to raise your deductible to $1,000, you may save as much as 25 percent.

Can you negotiate home insurance rates? ›

Is homeowners insurance negotiable? You cannot negotiate your homeowners insurance quote, but you can lower the amount you pay by taking a variety of steps—maintaining a good credit score, paying in full, installing protective devices, researching discounts, and more.

Why is home insurance getting more expensive? ›

Climate change isn't the only factor. Insurance companies also point to the rising cost of replacing homes, as inflation for building supplies and labor has soared. The companies also blame limits placed on insurance premiums in some states, including California.

Is homeowners insurance going up in 2023? ›

Homeowners can expect to see their premiums increase by an average of 7.1% in 2023, according to S&P Global Market Intelligence. Of course, homeowners insurance rates haven't increased in even measure throughout the country in early 2023.

What four major factors determine the cost of home insurance? ›

Here's a rundown of 10 factors that could impact your home insurance costs.
  • Your Location. ...
  • The Size of Your Home. ...
  • The Condition of Your Home. ...
  • If You Own or Finance Your Home. ...
  • Your Level of Coverage. ...
  • Your Deductible. ...
  • Previous Homeowners Insurance Claims. ...
  • The Cost of Materials and Construction.
Jan 13, 2023

What is the 80% rule in insurance? ›

The 80% rule dictates that homeowners must have replacement cost coverage worth at least 80% of their home's total replacement cost to receive full coverage from their insurance company.

What to say and not to say to a home insurance adjuster? ›

You should never admit any fault or even partial liability for what occurred. Often, the less you say, the better. Don't offer theories about the damage. All repair and replacement costs should be substantiated rather than based on your opinion.

Can you call your insurance company to lower your rate? ›

Auto insurance prices are non-negotiable, so you can't ask your car insurance company to lower your rates. However, there are several ways to find more affordable premiums. Compare quotes from multiple insurers. Although states regulate the cost of car insurance, different companies offer varying rates.

What are 3 things that could make home insurance go up? ›

Why Homeowners Insurance Rates Go Up
  • 1: Filing Claims May Mean Higher Premiums. ...
  • 2: Property Changes & Attractive Nuisances. ...
  • 3: Inflation Strikes Again. ...
  • 4: Construction Costs in Your Area Affect Your Rebuild Cost. ...
  • 5: Your Insurance Score Dropped.

What factor affects home insurance premiums the most? ›

Factors like where you live, your home's replacement cost, and your policy deductible generally affect your home insurance premiums the most.

Which homeowners insurance is the most expensive? ›

Travelers is the most expensive homeowners insurance company for $200,000 and $350,000 dwelling amounts. Shelter is the most expensive home insurer for the $500,000 and $750,000 dwelling coverage amounts. Rates vary significantly among companies because they each have their own formulas for pricing.

Why did my homeowners insurance double in 2023? ›

The increase is caused by inflation, but some say climate change could also affect your rates. When you get your home insurance premiums for 2023, you could be in for sticker shock.

Why did State Farm home insurance go up? ›

Insurance company State Farm has asked to hike rates on homeowners by an average of 28.1% in response to wildfire risks and skyrocketing construction costs, according to the California Department of Insurance, which is charged with evaluating rate increase requests.

Will insurance rates go down in 2023? ›

Car insurance costs are on the rise in 2023. According to personal finance website ValuePenguin, insurance rates across the US are expected to rise by 8.4%, bringing the total average premium for full coverage to $1,780 per year.

What is the most important part of homeowners insurance? ›

The most important part of homeowners insurance is the level of coverage. Avoid paying for more than you need. Here are the most common levels of coverage: HO-2 – Broad policy that protects against 16 perils that are named in the policy.

How can I save money on my insurance premiums? ›

Auto Insurance
  1. Shop around for your car insurance.
  2. Compare insurance costs before you buy a car.
  3. Raise your deductible.
  4. Reduce optional insurance on your older car.
  5. Bundle your insurance and/or stick with the same company.
  6. Maintain a good credit history.
  7. Take advantage of low mileage discounts.
  8. Ask about group insurance.

How do you dramatically cut costs? ›

How To Cut Your Expenses
  1. Keep Track of Your Spending Habits. If you've ever had a toddler in the house, you know how they can disappear if you aren't keeping a close eye on them. ...
  2. Create a Budget. ...
  3. Update Subscriptions. ...
  4. Save on Utility Costs. ...
  5. Cheaper Housing Options. ...
  6. Consolidate Debts. ...
  7. Shop for Cheaper Insurance. ...
  8. Eat at Home.
Feb 10, 2023

Will a brick house tend to have a lower homeowners insurance premium? ›

Are Brick Homes Cheaper to Insure? Because brick and masonry homes are more resistant to fire and wind damage than frame houses are, brick houses tend to be cheaper to get insurance coverage for.

Will a older house tend to have a lower homeowners insurance premium? ›

Home insurance for older properties tends to be more expensive because: Structures and systems that have seen decades (or even centuries) of wear and tear are more likely to cause problems.

What are 4 or more factors that will increase your homeowners insurance premiums? ›

The price of your home and the cost to rebuild it. The amount of coverage. Your home's age and condition. Home security and safety features.

How much of your home value should you insure? ›

Most homeowners insurance policies provide a minimum of $100,000 worth of liability insurance, but higher amounts are available and, increasingly, it is recommended that homeowners consider purchasing at least $300,000 to $500,000 worth of liability coverage.

What value should I insure my house for? ›

Ideally, your dwelling coverage should equal your home's replacement cost. This should be based on rebuilding costs—not your home's price. The cost of rebuilding could be higher or lower than its price depending on location, the condition of your home, and other factors.

What is the 10 10 rule insurance? ›

The most commonly cited is the "10/10 rule." This rule states that a contract passes the threshold if there is at least a 10 percent probability of sustaining a 10 percent or greater present value loss (expressed as a percentage of the ceded premium for the contract).

How to scare a home insurance adjuster? ›

Insurance adjusters often start with a lowball offer, hoping you will accept it without question. To scare an insurance adjuster, you must demonstrate that you know the true value of your claim. Reject the lowball offer in writing and provide a detailed explanation of why you believe the offer is inadequate.

What not to say to a insurance adjuster? ›

What Not to Say to an Insurance Adjuster
  • Never Admit Fault. ...
  • Don't Answer Questions About the Incident. ...
  • Don't Give Information about Your Physical or Emotional Condition. ...
  • Don't Accept the Initial Settlement Offer. ...
  • Contact a Florida Car Accident Attorney Today.
Dec 13, 2022

What not to say to insurance? ›

Some key phrases to avoid saying to an insurance adjuster include: “I'm sorry.” “It was all/partly my fault.” “I did not see the other person/driver.”

How to negotiate with insurance companies? ›

Tips for Negotiating With an Insurance Claims Adjuster
  1. Come well-prepared with supporting evidence. Records and documentation are critical components of the process. ...
  2. Calculate a full settlement amount. ...
  3. Know your bottom line. ...
  4. Beware of the first offer. ...
  5. Get the settlement offer in writing. ...
  6. Read the fine print.
Feb 17, 2023

Why are the insurance company trying to lowball me? ›

Insurance adjusters usually propose a lowball offer because their companies don't want to pay more money than they have to, and they think they can get away with it if the claimants don't have experience negotiating these types of claims.

Which insurance company says surprisingly great rates? ›

Surprisingly Great Rates | State Farm®

What is one way to lower the cost of your insurance deductible? ›

Ask for higher deductibles

Deductibles are what you pay before your insurance policy kicks in. By requesting higher deductibles, you can lower your costs substantially.

What would be one way to lower your premiums on your home insurance quizlet? ›

One way to lower the premiums you pay on your insurance is to have a higher deductible. Your insurance credit score depends​ on, among other​ things, your payment history and the types of credit used. Since most​ homeowners' claims are for relatively small​ amounts, high deductibles will keep your insurance costs down.

What are some factors that may change the price of homeowners insurance? ›

What factors affect the cost of homeowners insurance?
  • The location of your home.
  • The replacement cost of your home.
  • Your policy deductible.
  • The condition of your roof.
  • Your dog's breed.
  • Your claims history.
  • The age of your home.
  • A home renovation or remodeling project.
Feb 7, 2023

What factors can decrease your insurance rate? ›

Some factors that may affect your auto insurance premiums are your car, your driving habits, demographic factors and the coverages, limits and deductibles you choose. These factors may include things such as your age, anti-theft features in your car and your driving record.

Is it better to have a $500 deductible or $1000? ›

A $1,000 deductible is better than a $500 deductible if you can afford the increased out-of-pocket cost in the event of an accident, because a higher deductible means you'll pay lower premiums. Choosing an insurance deductible depends on the size of your emergency fund and how much you can afford for monthly premiums.

Does lowering your deductible make your insurance go up? ›

With a higher deductible you'll pay more out of pocket, but your car insurance rate will be lower. Voice Over: With a lower deductible your rate will be higher, but you'll pay less out of pocket.

Is it better to pay higher deductible or lower deductible? ›

Low deductibles are best when an illness or injury requires extensive medical care. High-deductible plans offer more manageable premiums and access to HSAs.

How do I adjust my home insurance? ›

Five steps to changing your homeowners insurance
  1. Step 1: Check the terms and conditions of your existing policy. ...
  2. Step 2: Think about your coverage needs. ...
  3. Step 3: Research different insurance companies. ...
  4. Step 4: Start your new policy, then cancel your old one. ...
  5. Step 5: Let your lender know.

How can I save my insurance premiums? ›

Raise your deductible

A quick way to reduce your premium is to raise your insurance deductible. The amount you pay if you have to make a claim. Raising your deductible puts money into your pocket every month that would have gone to your insurer.

What is an effective strategy for reducing insurance costs? ›

Increase your deductible

The higher your deductible is, the less that you'll pay for your premium. For example, going from $250 to $500 could reduce the cost of your collision and comprehensive coverage by up to 30%. And if you go from $500 to $1,000, you could save an additional 31%.

What five 5 factors play a role in the cost of home insurance? ›

Factors affecting home insurance costs
  • Weather. Florida and Texas have the highest home insurance premiums due in no small part to the likelihood of catastrophic weather events. ...
  • Population. ...
  • Neighborhood. ...
  • Proximity to risk factors. ...
  • Personal factors. ...
  • Credit. ...
  • Personal belongings. ...
  • Home-related factors.
Mar 21, 2018

What are 6 factors that influence the cost of insurance you will pay? ›

What factors are most important for car insurance rates?
  • Age. Age is a very significant rating factor, especially for young drivers. ...
  • Driving history. This rating factor is straightforward. ...
  • Credit score. ...
  • Years of driving experience. ...
  • Location. ...
  • Gender. ...
  • Insurance history. ...
  • Annual mileage.

What factor affects insurance premiums the most? ›

Factors That Affect Car Insurance Rates the Most
  • Car make and model. ...
  • High-risk violations. ...
  • Yearly mileage. ...
  • Credit history. ...
  • Driving record. ...
  • Zip code. ...
  • Marital status. ...
  • Gender. Gender is a factor that can influence car insurance rates in some states.

Top Articles
Latest Posts
Article information

Author: The Hon. Margery Christiansen

Last Updated:

Views: 5791

Rating: 5 / 5 (70 voted)

Reviews: 85% of readers found this page helpful

Author information

Name: The Hon. Margery Christiansen

Birthday: 2000-07-07

Address: 5050 Breitenberg Knoll, New Robert, MI 45409

Phone: +2556892639372

Job: Investor Mining Engineer

Hobby: Sketching, Cosplaying, Glassblowing, Genealogy, Crocheting, Archery, Skateboarding

Introduction: My name is The Hon. Margery Christiansen, I am a bright, adorable, precious, inexpensive, gorgeous, comfortable, happy person who loves writing and wants to share my knowledge and understanding with you.