Top Reasons Your Home Insurance Premium Might Increase [2024]

Owning a home is often a dream come true, but when that dreaded notice arrives in the mail—informing you that your home insurance premium has gone up—it can feel more like a nightmare. If you’re wondering why your premiums have spiked, you’re not alone. Homeowners frequently express surprise and frustration over these increases, especially when nothing on the surface seems to have changed. But there are a variety of factors at play, some more obvious than others. Let’s break down the top reasons your home insurance premium increase might have happened, and what you can do about it.

1. Your Home Aged Since Last Year

It might not be something you think about regularly, but the age of your home plays a significant role in determining your insurance premiums. The older your home gets, the more expensive it becomes to insure. That’s because homes, much like anything else, deteriorate over time. Materials weaken, systems wear out, and even the most well-maintained property is subject to the natural process of aging. Every year your home grows older, it becomes more prone to issues such as plumbing leaks, electrical faults, or roof damage—all of which can lead to costly insurance claims.

Older homes are also more expensive to repair or restore, especially if they contain outdated materials or architectural details that require specialized skills to fix. For example, homes built decades ago may have electrical wiring or plumbing systems that are no longer up to code, making any necessary repairs more complicated and expensive. Furthermore, older homes often lack the energy efficiency and weather-resistant construction techniques found in newer homes, meaning they’re more vulnerable to damage from storms, fires, or other natural events.

So, even if you haven’t made any major changes to your home in the past year, the fact that it’s another year older could still trigger a premium increase. Insurance companies take this aging process into account when assessing risk, and as your home’s structure and systems age, the likelihood of a claim increases.

What You Can Do:

One way to counteract the higher costs of insuring an aging home is to invest in upgrades that can reduce the risk of claims. For instance, replacing old wiring, upgrading plumbing, or installing a new roof can not only improve your home’s safety but may also qualify you for discounts. Some insurers offer incentives for making these improvements, so it’s worth checking with your provider. Even small updates like installing energy-efficient windows or modern smoke detectors can make a difference in how your home is perceived by insurers.

2. Inflation and Rising Repair Costs

Just as the cost of groceries or a night out has increased, so too have the costs associated with home repairs and rebuilding. This is directly linked to inflation, which affects everything from the price of building materials to labor. When the cost of replacing or repairing homes rises, so does the amount insurers have to pay out in claims.

To put it simply, if your home insurance policy is designed to cover the cost of rebuilding, that cost has probably gone up over time. Even without any claims, this will reflect in your premium. It’s a bit like your home getting more expensive without you lifting a finger.

What You Can Do:

Make sure your home’s insured value matches its current market or replacement value. You don’t want to be over-insured or under-insured. You could also ask your insurer about “inflation guard” endorsements, which adjust your coverage annually to keep up with inflation without a huge premium spike.

3. Home Renovations and Additions

It may come as a surprise, but even that beautiful new kitchen or added sunroom could be contributing to your home insurance premium increase. When you renovate or expand your home, you’re increasing its value—and with greater value comes higher costs to repair or rebuild in the event of damage. Plus, adding features like a pool or even upgrading your appliances can increase the overall risk profile of your home.

Of course, these changes can add tremendous value to your life and your property, but they also mean that your insurance company needs to re-evaluate the cost of covering your home. Even if you’re not making major structural changes, things like upgrading electrical systems or plumbing could lead to adjustments in your coverage.

What You Can Do:

Always inform your insurance provider before starting major renovations. While it might seem tempting to avoid the paperwork, failing to update your policy could leave you underinsured. On the bright side, installing security systems or fire alarms during your renovations could reduce your risk—and possibly your premium.

4. Changes in Your Neighborhood

You’ve probably heard that real estate is all about “location, location, location.” Well, your insurance premium is no different. If your neighborhood has experienced an increase in crime, a decline in property values, or even changes in local government policies, this could trigger a higher premium. Insurers constantly assess the risk factors associated with your area, and those risk factors don’t remain static.

For instance, new businesses moving in, an increase in traffic, or even new construction nearby can all influence your home’s perceived risk. If your once-quiet suburb is suddenly bustling with new activity, don’t be surprised if your insurance premium reflects that.

What You Can Do:

While you can’t control the dynamics of your neighborhood, you can take steps to secure your home and reduce the likelihood of a claim. Installing advanced security features, maintaining your property, and even joining neighborhood watch programs can sometimes result in discounts from insurance companies.

5. Your Claims History

Another factor that often flies under the radar? Your own history with claims. While it seems logical that multiple claims would lead to higher premiums, many homeowners are unaware of just how long those claims can stick with you. Even small, seemingly inconsequential claims may affect your insurance rates for years to come.

Additionally, claims related to weather damage, theft, or accidents can all contribute to an increased risk profile. Insurers often view homeowners with a history of frequent claims as higher risk, and in response, they adjust premiums accordingly. It’s not just about the cost of the claims but the pattern of risk that those claims represent.

What You Can Do:

To avoid frequent claims impacting your premium, consider paying for minor repairs out of pocket. Reserving your insurance for more significant issues can help maintain a clean claims history and keep your premiums from rising unnecessarily.

Combat Your Rising Homeowners Insurance Premiums With TGS Insurance

At TGS Insurance, we understand that rising home insurance premiums can be frustrating and confusing. That’s why we’re here to make the process simple, transparent, and affordable. Our team of experts works with a network of top-rated insurance providers to compare policies and find the right coverage tailored to your needs. Whether your premium has gone up due to inflation, home renovations, or changes in your claims history, we’ll help you explore your options to keep your policy both comprehensive and cost-effective.

We’re committed to making sure you aren’t overpaying for your coverage and that your home is fully protected. If you’re considering upgrades, renovations, or want to re-evaluate your coverage, we’re ready to assist every step of the way. With TGS Insurance, you get more than just insurance—you get peace of mind.

Get in touch with us today for a free, no-obligation quote, and see how TGS Insurance can help you save on your home insurance. Let’s navigate the complexities of home insurance together!