Is Your Homeowner’s Insurance Going To Cost You More Than A Few Shingles?

If you live in the state of Georgia, you may notice a big jump in your Homeowners Insurance here in 2012.   Often, people don’t really look closely at their homeowner’s policies because their mortgage payments are tied together with their principal, interest, real estate taxes, and homeowner’s insurance all paid at one time.  Even though you might get a statement from your insurance company, I’ve seen people not reviewing these statements closely on a year to year basis.   This can be especially true as people quickly scurry to the refinance window trying to lock in the incredibly low long term interest rates.

After rising steadily for the past few years, homeowner insurance premiums are expected to jump another 5% this year to $1,004, according to the Insurance Information Institute. That’s the biggest yearly increase since the market downturn and will mark the first time the national average premium is above $1,000. (source:

Premiums will rise even higher in some states. In Georgia, GuideOne Insurance will raise rates by 12% on average starting this month. Farmers Insurance is increasing rates in Texas by 10% on average. Last month, Allstate started raising rates by 15% in Pennsylvania. And Florida insurer Citizens Property Insurance Corp. and North Carolina Farm Bureau are raising rates on some condo and homeowner’s by 21% and 6%, respectively. (source:

If you have seen an increase in your premium this year, here are three things you could attempt to do so your rates don’t blow the roof off of your budget:

  • Raise Your Deductible –   I’ve always been a bigger fan if you have a healthy cash reserve to keep deductibles on things like your homeowner’s insurance higher (in the $1,000 level or higher if the insurance company allows for it).   You can never know when a major item will hit your home like lightning striking your air conditioner, but changing the deductible to a higher number could save you as much as 25%.
  • Make Sure You Have A Good Credit Record –  I’ve underscored in other smart money moves articles how your credit score will affect all types of things over the next decade.   Many insurers are increasingly using credit scores as they price out homeowner’s insurance policies.   Fixing your score won’t only help you when you go for a loan, but it could help keep your rates down come insurance time.
  • Review Your Coverage – Is your home worth what it was before the downturn in this real estate.   I’ve seen many homeowners’ go to their local county to appeal their real estate tax bill, but very few go back to their homeowner’s insurance company to change the amounts on their insurance.  Will it cost the same to rebuild your house today as it did in 2007?   Are the contents of your house worth the same?  Did you install a new alarm system?   All of these types of questions could be important in helping you save money.

There are lots of other ways to save, but these are three that I think can have an immediate impact.  In Georgia, most of the major companies filed requests to raise rates from 18% to 22%, says Steve Manders, director of insurance product review at the state’s department of insurance. The states say they don’t usually approve requests for increases by the exact amount insurers ask for. (source   You should always think about getting auto and home insurance from the same carrier to get a mutli-policy discount, but keep an eye on the weather because the next natural disaster you could face in your budget is the dreaded increase in your homeowner’s insurance.

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Written by:

Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®

Co-CEO and Founder of oXYGen Financial, Inc – The Leaders in Gen X & Y Financial Advice

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About the author  ⁄ Ted Jenkin @ Your Smart Money Moves

Ted Jenkin @ Your Smart Money Moves

Ted Jenkin has spent the past 23 years giving personal financial advice to thousands of people across the United States. After graduating from Boston College in 1991, Ted spent more than 16 years working for American Express Financial Advisors/Ameriprise Financial. He was one of the youngest people in the history of the company to reach both Field Vice President and Group Vice President level. He managed more than 800 financial advisors throughout 8 states in his last position with the company.In 2008, Ted founded oXYGen Financial to help revolutionize the financial services industry by creating a new company that focused on serving the X and Y Generation. oXYGen Financial now has more than 2,200 clients throughout 25 states across the country many coming from social media techniques. Ted has been featured in over 30 magazines and newspapers including the Wall Street Journal, Business Week, and The Huffington Post. He was on the cover of Registered Rep magazine and featured in the ‘what will financial planning look like in 2023’ article done by Financial Planning Magazine. He has six advanced designations from the College for Financial Planning (CFP®, CRPC®, CRPS®, AWMA®, AAMS®, CMFC®) and is an on air radio personality.

One Comment

  • April 18, 2012

    Most homes are under insured, even in high risk places like California! It may be pricey but not as pricey as buying a new home.