Home Insurance Updates
It’s no secret that the insurance industry has been going through its fair share of turbulence in recent years. We know it is not easy to accept increasing rates and other enforced policy changes, but we appreciate your loyalty and patience while we get through this tough stretch. We always want to make sure our clients are fully informed about their policies and any changes that may occur. As carriers continue to roll out new guidelines and requirements, we wanted to make sure everyone is aware of what has become a few universally enforced home insurance updates.
In case you are unaware of the cause of all of this, the summer of 2021 saw a record number of large storms come through the Midwest causing massive amounts of home insurance claims. From new roofs and siding repairs to water damage, the frequency of these claims was at an all-time high. Adding on top of these losses, inflation was really starting to impact material and labor costs which caused these claims costs to be way above expected. As a result, nearly all insurance carriers were paying out way more in claims than they were taking in from premiums. These negative results have carried over in recent years and unfortunately, clients are having to take on several rate increases. It is a slow recovery process for insurance carriers to find a balance between rates and claims costs, but know that these changes are necessary for insurance carriers to be able to provide the proper coverage for each of their clients.
In order to speed along the recovery process for these carriers, many have introduced new coverage adjustments moving forward.
The first adjustment is to home insurance deductibles (what you pay out of pocket in the event of a claim). Many carriers have increased the minimum deductible requirement on new home insurance policies and renewals. Some have also implemented a separate wind/hail deductible which is usually a higher dollar amount than the deductible for all other perils.
The other adjustment home insurance carriers have had to make is changing how they insure roofs. During the stretch of storms that came through, insurance carriers were insuring most of their roofs based on replacement cost – meaning they would pay the full cost to replace the roof. With roof claims being far and away the most common during that stretch, carriers have been forced to adjust coverage for roofs in some cases. Depending on the age and condition of the roof, it could be adjusted to being insured based on actual cash value – which factors in depreciation. Stricter guidelines on what type of roof they will insure have also been adopted by carriers.
Where we come in
If your home insurance carrier is adopting either of these changes, you will be notified of these changes in advance. The changes will most likely be implemented on your next renewal.
As you can see, the insurance industry has evolved pretty rapidly in these past few years. With new guidelines, adjustments to coverage, and rate changes, it’s extremely important to verify you are properly protected. Your CRG agent reviews each insurance renewal individually and verifies that the policy is the best available for the respective client. They are always available to discuss any questions or concerns regarding your policies. We appreciate your trust and your continued business!