Hello StumbleUpon users! Would appreciate a thumbs up from the article you're reading! No Debt Plan is a blog about living a debt-free life. If you're new here, you may want to subscribe to my RSS feed (e-mail subscription also available). Learn more about me, or some of my most popular posts. Thanks for visiting!
We recently got a notice in the mail from our homeowner’s insurance company informing us that they were increasing our coverage by 6%. The claim is that in the past year the cost to rebuild our house has increased by that much, thus the coverage is going up.
However, even though our coverage is only going up 6%, our rate is increasing 13%. Funny how that works.
I am not well versed in homeowner’s insurance. I definitely don’t want to be undercovered. Of course, I don’t want to be overpaying for coverage either. I can let them know not to increase the coverage, or increase it to a different amount.
What should I do?
Edit: For some reason when I posted this, comments were blocked. I’ve gotten that fixed. Sorry about that…
3 Comments, Comment or Ping
Russ
Kevin,
A couple of thoughts:
- use this as an opportunity to comparison shop with other, reputable insurers
- check your policy deductibles. i often find people have their deductibles too low which increases your premiums. since homeowners insurance is there in case of emergency, you might consider moving your deductible up to lower your policy premiums
- you definitely want the coverage increase, but it’s the premium increase that needs to be considered - perhaps with one or both of the above, you can get it somewhere that you’re comfortable
Good luck with it
Aug 19th, 2008
Rich
How can it be 6% when it goes up 13%?
Somethings a little fishy here, isn’t it?
Though, you knew an insurance hike was gonna come sooner or later- what did you get extra for that I wonder?
Aug 19th, 2008
My Dollar Plan
The coverage went up 6%, but the premium was probably partially due to that and partially due to base rate increases.
Insurers often increase everyone’s Coverage A (your total insured amount) the same amount if they don’t have all your information on file. You can call your agent and ask him to calculate the cost to rebuild. He should have a calculator that he can plug in all your information. It may or may not have a different number, but it’s worth a call.
In addition, be sure that you are not insuring your land, but only your house. In the event of a fire, you would still have your land.
Also, like Russ mentioned, look into raising your deductible and shop around.
Aug 19th, 2008
Reply to “Accept Homeowners Insurance Increase?”