The No. 1 Reason for Home Insurance Cost Increases

Roof Problems
Photo by Ceridwen

Does it seem like the amount you pay for your homeowners policy continues to climb? But everything is, right?┬áThe price of food, cars, clothes. When you were a kid, everything was cheaper. But inflation and the price of oil has little to do with premium increases. It’s actually much simpler than that.

Claims drive the cost of any insurance policy.

The recent rise in accidents due to distracted driving has had a huge effect on car insurance premiums. Homes are no different. But unlike accident statistics, there may be something you can do about your home insurance premium.

Our houses are intended to protect us and our things from the elements. And no part of the house works harder to do this than the roof. Our roofs take a beating from rain, sun, wind, hail and the occasional basketball. And because of that, the majority of claims are roof related. As a result, insurance companies are very interested in what kind of roof you have, what shape it is in and how old it is.

If you haven’t had any claims, the age of your roof is probably the number one reason for your homeowners premium to go up.

A typical asphalt shingle roof that is supposed to last 25 years is considered old by insurance companies after 10 years. Some companies won’t insure the house at all if the roof is older that 15 years. If your roof is five years old or less, you’re in the best shape. The insurance company will not only take you at a lower cost, but your coverage will also be better.

That gets into completely different territory. You think price is the most important factor unless you’ve ever had a claim. Once you’ve had a claim, you understand that being able to replace your roof is what really matters. But insurance companies do not want to pay for a brand new roof on a claim where a 20 year old roof was damaged. Therefore, companies that will insure homes with older roofs will only insure the roof for actual cash value. What that means is if you have a claim, and your roof needs to be replaced, they will pay for an old roof. Not a new one. That scenario would put you in a position of not only paying your deductible but also paying the difference for a new roof.

Replacing an old roof could lower your premium around 25%.

And having architectural shingles or better yet metal roofing installed will keep that premium down longer. And best of all, you’ll be insured for replacement cost and not just cash value.

Are you unhappy with your homeowners premium? Could it be related to your roof?

Have you replaced your roof in the last few years? Have you told your agent?