Why Are Homeowners Rates Increasing?

The short answer: weather and shared risk.

When a wave of major storms strikes Ohio, or anywhere in the U.S. for that matter, your carrier uses insurance premiums to pay claims to help customers, like you, recover. If they expect more storms, your rates increase. Ohio has been rocked with several devastating storms the past few years, from hail storms to tornadoes.

Simply stated, a greater frequency and severity of storms create higher premiums, regardless of whether or not you have had a claim.

Experts identified causes for the increase, but the two major reasons are:

  1. An increase in severe weather events: The effect of La NiƱa, which causes a collision of cooler and warmer air over the U.S. has agitated rougher weather across the region.
  2. The growing population: More people means more buildings and structures lying in potential paths of destruction.

“We are in the midst of a very long-term trend. Whatever the underlying causes are, this is pushing up the cost of providing insurance in many parts of the country. Insurers have begun to reflect that in their rates,” says Robert Hartwig, chief economist and president, Insurance Information Institute.

According to estimated figures from the Ohio Insurance Institute, Ohio ranks 6th lowest in the U.S. based on its average homeowners insurance premium. Even with the increase looming, the cost of coverage remains considerably lower in Ohio than in most other states.

How to save on your homeowners insurance?

The best way to reduce the impact of a rate increase is to talk to us about your coverage options so we can help you find the best solution for your needs. Give us a call or stop by our Rocky River office to discuss your homeowners policy. Our friendly agents are here to help with all of your insurance needs.

August 22nd, 2015 by Hubbard Insurance Agency