Rising Insurance Rates: Impact on Renters and Homeowners (Part 2 of 3)

Why are insurance rates rising and why can it be more challenging for renters and homebuyers to secure insurance coverage? In a tough market, insurers raise rates to match rising costs. They also become more selective about approving policies that present higher risks. Knowing these factors can help you make more informed choices, saving you money on coverage and improving your chance of getting insured.

Property Renter Challenges

Securing renter's insurance coverage can be a challenging task for property renters, and there are several reasons why this may be the case:

• Location Risk Factors - Some insurance agencies may choose to refrain from offering new policies in areas with high claim rates. A home or apartment's geographical location significantly impacts its susceptibility to natural disasters, such as hurricanes in Florida or wildfires in California. Additionally, if the property is far from essential services like fire stations, renters may face rejection from insurance providers.

• Claims History - Previous claims can affect an individual's likelihood of securing insurance coverage. Insurers often perceive those who have filed claims in the past as more likely to file future claims, which can result in rejection or higher premiums.

• Pet Ownership - Renters with pets may have trouble obtaining insurance coverage. Some insurers may reject applicants with certain types or breeds of pets due to perceived property damage or liability risks.

• Landlord History - A landlord's claims history can influence a rental property's insurance eligibility. If the property has a record of frequent claims, insurers may be hesitant to provide coverage to prospective renters.

Navigating these challenges requires careful consideration and research by renters to find suitable insurance options that meet their needs and circumstances.

Homeownership Challenges

When starting the homebuying process, seek home insurance quotes immediately. Most mortgage lenders require proof of insurance coverage before loan approval to safeguard their asset against potential loss. Lack of insurance exposes you to significant financial liabilities, which could prevent you from being able to afford home repairs or replacements.

While some insurers require an inspection for a quote, others do not. Getting an inspection can also help you decide which, if any, remodeling projects or enhancements to focus on after your loan is approved and you've moved into your new home.

Insurance brokers can secure quotes from multiple companies, so look for ways to bundle or package home, auto, and life coverage to yield cost savings. The first-year insurance premium can be included in closing costs. If you have an escrow account, your homeowner's insurance premium is bundled into your mortgage payment.

When it comes time to file a claim against your policy, keep in mind that claims can affect your rate - in some cases up to five years, impacting the cost of your premiums. If your insurance expenses increase drastically, it can be helpful to quote your insurance needs with alternative providers to see if other options make more sense for your budget.

How First Mid Insurance Group Can Help

First Mid Insurance Group are experts in navigating the complexities of the insurance market. We are dedicated to serving you. Let us assist you with:

• Reviewing your current policies to ensure they meet your needs
• Advising whether switching carriers could save you money
• Suggesting adjustments to your deductibles, insurance coverages, or premiums to optimize your coverage and costs
• Bundling your policies could help save on costs and give you a discount
• Implementing risk management plans

Need help navigating all the changes in the insurance market? Contact us today and let us help you find the best insurance solutions for these challenging times. We're here to support you every step of the way.

Insurance products are offered through First Mid Insurance Group. First Mid Insurance Group, Inc. is a wholly-owned subsidiary of First Mid Bancshares, Inc. and an affiliate of First Mid Bank & Trust, N.A.

Sources:

• Experian
• Bankrate.com

Public link

Please use the above public link if you want to share this noodl on another website.