(NewsUSA) – Worried that you’ll soon be paying more for your homeowners insurance? That’s a lot more reasonable a concern than, say, Gwyneth Paltrow fretting about the burdens of being famous.
In fact, in some states premiums have risen so dramatically — Texas being Exhibit A, with recent hikes of as much as 14.9 percent — that they’ve become a hot political issue. So what triggers a rate increase? Well, if you understand that a lot of it involves actuarial calculations — insurance companies’ need, as it’s been described, to “collect enough money and pay only a few claims in order to make a profit after business expenses” — you’ll at least have a shot, in some cases, of avoiding the hit.
Read on for some of the biggest warning signs of an impending rate increase.
Filing a claim. Consider your suspicions more or less confirmed. According to a recently released report by InsuranceQuotes.com, putting in for even one claim results in an average hike of 9 percent nationwide and as much as an average of 32 percent in Wyoming.
“Even a denied claim can cause your premium to go up,” says senior analyst Laura Adams.
And don’t even ask what kind of spike you’re looking at should you file a second claim. (Okay, an average of 20 percent, per the report, with Michigan policyholders particularly soaked for as much as 71 percent.)
Improper roof care. You’ve undoubtedly heard how your home’s “curb appeal” can determine whether prospective buyers flock to (or run from) your residence without even exiting their cars. Well, insurance adjusters can — and do — perform “drive-bys” of their own. And their main concern is how well your roof is performing.
If it looks in bad shape, insurers can jack up your rate or cancel your policy entirely. “Insurance carriers would prefer not to cover a home when a roof looks like it’s about to fail,” says one expert.
If, on the other hand, the same adjuster sees that you’ve got a snappy new roof, your rate may actually decrease.
Prefer the latter scenario? Jason Joplin, program manager of the Center for the Advancement of Roofing Excellence, says to check out the Timberline collection of shingles from GAF (www.gaf.com) — North America’s largest roofing manufacturer — since those shingles have the advantage of being “rugged, good-looking, and affordable” all at the same time.
Change in circumstances. Has your once-cozy suburban neighborhood ballooned in size? Not good, but consider yourself toast if the actuaries spot a pattern — and they will — of your neighbors having recently filed any of those dreaded claims.