We are seeing rate increases from all insurance carriers in the Northwest for homeowners insurance. For years this category of insurance has been relatively stable and in some limited cases we saw rate reductions during the recession and soft insurance market.
Now we are witnessing the change in the marketplace to a hard market where excess capacity has been absorbed by insurance carriers and extraordinary natural disasters in 2011 nationwide that have forced insurance carriers to revise their rates by state. The Northwest is among the states with generally lower rate increases with the gulf coast and south eastern seaboard seeing the largest increases.
What this means for those of us in the Northwest is there will be rate increases for homeowners insurance for the next several years as carriers adjust their rating models to compensate for higher than normal claims through increased natural disasters, thefts and vacancies.
As an agent I don’t advocate these rate increases and I do not have any control over them. I know they are coming and I want to prepare my clients with this information. It is important to make certain that each home is adequately covered however there are options that we can use to control insurance costs chiefly by considering a higher deductible. This is not for everyone but if you can afford to pay the first $1,000 of a loss or even $2,500 you can lower your insurance premium.
Now is a great time to meet with your insurance agent before your next renewal to discuss your coverage and insurance options.