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With an increasing threat from the environment, home insurance costs are soaring. Here are some tips on how to keep your rates down

If you’re worried about how you’re going to afford home insurance, you’re not alone. NPR recently reported that many major insurers are reducing the number of home insurance policies they issue — and, in some cases, informing homeowners that their existing policies will not be renewed.

That’s what happened to Alainta Alcin, a public health professional and personal finance enthusiast who co-hosts The Financial Griot. “I live in West Palm Beach, Florida, and many insurance companies have opted out of insuring Florida residents,” she told us. “Unfortunately, I have now become a part of this statistic.”

After Alcin began an insurance claim mediation process to receive compensation for damage from a leaky water heater, her insurer informed her that her home insurance policy would not be renewed. This meant that she was forced to find another provider. “Fortunately, the state of Florida has a state-funded homeowners insurance program, but I have limited options to choose from.”

Why is home insurance so expensive? And why are so many insurers dropping policies? The answer might have something to do with climate change.

As weather patterns shift and homeowners find themselves facing unprecedented wildfires, flooding, tornadoes and hurricanes, they’re also finding it more and more difficult to insure their homes. Florida residents are in a uniquely complicated situation, given that their state is dealing with not only climate-related issues but also an unexpected spike in insurance fraud.

That said, finding homeowner’s insurance isn’t impossible — which is good news, because most homeowners are legally required to carry home insurance as a condition of their mortgage. The bad news is that it’ll probably cost you more than you were expecting. That said, whether you search for supplemental coverage or purchase a high-deductible policy and put your extra money into shoring up your home, it might be possible to get the insurance you need without paying more than you can afford.

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Compare providers and consider supplementary insurance

The first thing you should do — whether you’re already a homeowner or whether you are hoping to buy your first home — is get to know the insurance providers in your area. How do the big insurers like Allstate and State Farm compare to smaller, local providers? Do you live in a state that offers a state-funded homeowners insurance program?

Start asking for home insurance quotes, and start comparing benefits. The more you know about the types of coverage insurance companies offer in your area, the more likely you’ll be able to make an informed decision about which home insurance policy is best for your home and your budget.

“I would suggest that people shop around to compare rates and coverage,” says Adie Kriegstein, a 15-year veteran of the real estate industry. “Look for insurers that are prepared to offer the best coverage for their location’s most likely environmental weather hazards.”

Keep in mind that you might not be able to find a comprehensive home insurance policy that covers all potential hazards. A homeowner living in California, for example, is unlikely to have earthquake coverage included in a standard home insurance policy.

In some cases, you might want to purchase not only the homeowners’ insurance required by your mortgage provider, but also a supplementary policy that covers damage from the environmental threats and natural disasters that are most likely to affect your home. The National Flood Insurance Program, for example, helps homeowners get the coverage they need to protect their homes from flood damage.

Invest in a resilient home

The less damage your home experiences during an extreme weather scenario, the fewer repairs you might need after the weather recedes. Renovating your home before bad weather arrives could be one way to save money long-term, especially if you’re interested in taking out a home insurance plan with a high deductible.

Adie Kreigstein, who founded the NYC Experience Team at Compass Real Estate, advises all homeowners to consider making improvements that could allow their home to withstand potential threats. “It is important to also consider investing in home improvements that could allow your home a greater chance to be more resilient to extreme weather conditions. Regular home maintenance will also help your home during these conditions.”

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Improving and maintaining your home is also likely to increase the total value of your property, giving you an advantage when it comes time to sell your house. While most home renovations aren’t cheap, investing in a weather-resilient home might be worth the extra cash, as long as you don’t have to go into debt to get the job done.

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Know what to do if your insurer drops you

What should you do if your home insurance company announces that it is not going to renew your policy? Here’s Alainta Alcin’s advice: “If you are dropped by your insurance company, for any reason, don’t panic. Take it one step at a time. Do your research on state-funded home insurance, if you have one in your state, and start applying for new polices immediately.”

Alcin also advises homeowners to improve any aspects of their home that might have affected their previous insurer’s decision to drop their policy. “Do what you can to reduce your chances of being denied by a new insurer.”

Lastly, remember that homeowner’s insurance is part of the cost of owning a home. And while these costs are going up, the benefits of homeownership remain strong. “Home insurance policies and the risk of being dropped come with the territory of homeownership,” says Alcin, “but there’s still so much to gain from owning your own property and cultivating a house into a home.”

Our editorial policy

Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.

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Our disclosures

Haven Term is a Term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in certain states, including NC) issued by the C.M. Life Insurance Company, Enfield, CT 06082. Policy and rider form numbers and features may vary by state and may not be available in all states. Our Agency license number in California is OK71922 and in Arkansas 100139527.

MassMutual is rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of Aril 1, 2020 and is subject to change. MassMutual has received different ratings from other rating agencies.

Haven Life Plus (Plus) is the marketing name for the Plus rider, which is included as part of the Haven Term policy and offers access to additional services and benefits at no cost or at a discount. The rider is not available in every state and is subject to change at any time. Neither Haven Life nor MassMutual are responsible for the provision of the benefits and services made accessible under the Plus Rider, which are provided by third party vendors (partners). For more information about Haven Life Plus, please visit: https://havenlife.com/plus

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