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Why are my home and flood insurance rates higher?

The sad reality is that our insurance rates for home, wind, and flood will be increasing in the short term, and here are some reasons why: 

LAST YEAR’S SEVERE LOSSES 

2020 was an awful year for hurricanes, fires and global catastrophes. The greater expense results in higher insurance costs for you and me. 

GEOGRAPHY 

The coastal area has greater exposure to wind and flood damage than more inland areas, and this makes our rates higher. 

LAWSUITS 

Liability exposures from trampolines, swimming pools, holes in our yards, debris that could cause trips and falls, dangerous dogs that bite and other potential hazards cause legal defense expenses that lead to increases to our home insurance policies. 

AGING ROOFS 

Any roof beyond 15 years of age is considered old by the insurance industry because of the high rate of failure. This leads to higher insurance costs or reduced coverage in the form of exclusions or higher deductibles. If you install a new roof on your home, you should let your agent know so a roof credit can be added to your policy. Insurance companies love a new roof! 

HIGHER RECONSTRUCTION COSTS 

The increased expense of rebuilding and repairing, due to inflation and the overall higher cost of materials and labor, causes claims to be more costly and pushes rates higher. 

AGING HOMES THAT ARE NOT WELL MAINTAINED 

Insurance companies view these as “an accident waiting to happen.” Older homes have a higher incidence of claims, and thus higher insurance rates. 

CLAIMS MADE 

Any large or small claim you place on your policy, even if nothing is paid, will stay on your insurance record for five years and result in a policy surcharge over that period. Use your insurance for large claims and fix the small stuff yourself. 

As for flood insurance, based on the Federal Emergency Management Agency’s latest actuarial review, most homes using the National Flood Insurance Program may see their rates double over time, with rates increasing an average of 18 percent per year. 

Is there any good news? Yes! More insurance companies are writing in our area, and competitive pricing is available. Private flood companies are offering coverage in our area. Shopping your insurance every few years is a good strategy to be sure you have the best available rate. You don’t want to shop every year because you’ll lose out on loyalty credits. 

Bundling home and auto with the same agency may help, too. There also are deductible buydowns available to assist with the higher deductibles being mandated by insurance companies. 


Angelyn Treutel Zeringue is president of SouthGroup Insurance Services, a CPA, PWCAM, CBIA and licensed Trusted Choice Insurance Agent. Reach her at www.southgroupgulfcoast.com, (228) 385-1177 or azeringue@southgroup.net.

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