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Top Five Home Maintenance Tips to Protect Your Insurance Policy Against Rising Premiums

Taking Care of Your Home Could Have Twice the Benefit

By Lauren Dallas, Personal Lines Manager

As we’ve been sharing with clients, both in person and in our newsletter content, the costs to insure a home continue to rise, across the spectrum of insurance carriers. While recovering from historically high catastrophic loss and claims themselves, insurance companies are finding it necessary to pass along some of their own incurred costs to their policyholders.

In the worst-case scenarios, some carriers are pulling out of certain markets (such as homeowners) or entire states. This makes carrier-switching a much less common occurrence, as prices are rising virtually everywhere you turn.

That said, we continue to take our clients’ policies to market, always looking for the best coverage at the most competitive premium. In doing so, we often find ways to get creative with the policy design to find savings that might not have been previously available. Now more than ever, it’s important to consult with your independent agent to make sure no stones are being left unturned and that someone is looking out for your best interests.

What we are frequently recommending are various home maintenance tips and ideas for homeowners that increase the value of their homes while offsetting rising insurance costs at the same time. Perhaps the greatest of such opportunities is maintaining the exterior and utilities of the home in ways that meet or exceed the standards of the insurance companies quoting on your policy.

Smart Ways to Improve Your Home & Your Homeowners Insurance Rates

As insurance underwriters become more and more diligent about assessing a homeowner’s risk when quoting new policies, they are looking for every available piece of data that can protect their own interests from the catastrophic losses that have occurred in recent years. Claims history is being further scrutinized, and many are going so far as to find aerial views of the home — satellite images that can be zoomed in to the property level. 

What they are looking for is potential catastrophic damage that can occur to the home, and to mitigate such damages before they can ever occur in the form of claims. If they find something before the homeowner does, it could very well result in increased premiums at renewal, should they choose to renew at all.

Here are the four best and easiest ways to improve your home so that you can help mitigate rising costs and keep your coverage continuity.

1 - Look for Devices that Prevent Catastrophic Water Damage

Water can be the most disastrous of all damage, and is right up there with fire in terms of the devastation it can exact on a home. And just as we’ve had smoke detectors in the home for decades, it might be time to consider a water sensor that can alert you via phone notification or a sounded alarm if a leak is detected anywhere in the home. The sooner you can detect the leak, the more likely you can prevent the worst damage from happening. 

A bit more costly but perhaps more effective are whole-home water shutoffs. Similar to the detector sensors, these devices, when triggered by the detection of a leak, will cut off all water going to the home. The sensors prevent leaks or other water damage from going undetected for hours, days or even weeks (for those who spend significant time away from a home or vacation property). Again, like fire, if you can detect potential damage before it becomes too catastrophic, you can prevent significant damage and devastation. 

Many insurance carriers offer discounts to policyholders who demonstrate that such devices are in service and working. In either case, not only are you potentially preventing costly damages and repairs, you will save monthly on your insurance premiums as well!

2 - Shop for Whole-Home Generators

Another investment to consider is having a whole-home generator installed in the home to prevent significant damage to a home as the result of extended power interruption. Especially in the winter months in Michigan, should a home (or vacation property) lose power for an extended period of time, frozen pipes could burst and release damaging water into the property. Not only are such devices smart in the event you own a vacation property that goes unlived-in for weeks at a time (when frozen pipes bursting can occur with no one around to mitigate the damage), having one at your primary residence can add another layer of protection against costly damage. 

Once again, many insurance carriers will offer discounts to homeowners using whole-home generators that automatically kick in when the power goes out. This is another instance in which an investment in peace-of-mind can pay dividends in multiple ways.

3 - Consider Getting a New Roof

During the underwriting process, insurance companies will review recent claim data on the home, as well as look at satellite aerial images of the property. Old roofs, especially those with prior damage or claims, are red flags that can negatively impact the premium rates being quoted. If you feel you are in the market for a new roof, just know that documentation of a recently completed roof makes the home eligible for another discount that can help offset the rising premium costs.

Tip: Be sure to keep documentation of the completed roofing project and mention its completion to your independent insurance agent. Without that knowledge, underwriters are liable to rely on the satellite image they pull from the database, which may be outdated…and you could pay the price for inaccurate information!

4 - Remove Yard Debris and Dangerous Tree Limbs

Remember that aerial photo we mentioned that underwriters will be taking a look at when calculating the premiums on your homeowners insurance? Make sure they’re not finding yard debris that can negatively impact your rates, especially tree limbs that are touching the roof or structure of the home. If such hazards are detected, it could require extra steps to prove that the debris or limbs have been removed or trimmed in order for the carrier to even consider quoting on the homeowners policy!

A low-hanging limb can do more than merely damage the home’s exterior or windows — it can be the difference between whether you are able to secure a new policy, either at an affordable rate or perhaps even at all.

Upward Pricing Pressure to Persist Until 2025 or Longer

Unfortunately, we expect this current “hard market” to persist, at least through 2024 and perhaps beyond. Premiums will continue to rise more than many are accustomed to. Insurance companies are recouping losses, and they are in the driver’s seat when it comes to whom they choose to insure, which states to write policies in and how to price the premiums. They have incurred so much financial loss due to recent catastrophic events that they will walk away from business if it means subjecting their own assets to additional risk. Things will eventually soften, and inflation should begin to tame. We just can’t predict with confidence when that will be.

5 - Additional Tip: Consider Higher Deductibles to Offset Premium Increases A higher policy deductible will contribute to lower homeowners premiums. Some carriers are even insisting on a minimum deductible of $2,500, and we are often urging clients to consider a $5,000 deductible. The practice of “self-retention,” whereby homeowners retain some of the risk by self-insuring losses up to that $5,000 level, is one of those desired actions insurance companies prefer their policyholders to take.  Oftentimes, they will reward that with lower premiums than would otherwise be the case. 

In short, shopping for insurance right now is less fun than it’s always been for homeowners. Which is why we prefer to do the shopping for you — even in less than ideal market conditions. If you would like to review your current homeowners policy to determine if you are getting the best coverage available at the lowest premium, please contact us and we will be happy to provide you with a complimentary assessment of your policy.