The phone rang last Friday and it was from a long time customer named Bill. Bill has his home and auto insurance with Insurance For Texans and he was up for renewal. Due to our long time relationship with Bill, he called to ask us if his Ft Worth Home Insurance was going to go up Every. Single. Year. It sure seemed that way to him. He looked back at where his prices started with us, and where they are now. We realistically had to tell him yes. For the most part, that the rates do go up every year. The conversation quickly changed to why. Let's take a look at Bill's situation.
When Bill first placed his insurance with us many years ago, his house was fairly new and the roof had recently been replaced. This meant that we were able to maximize discounts for him on his home and auto insurance. Bill loved the fact that he could sit down with a local insurance agent who could address his needs and save him money. But as his roof and home aged, we started to watch the creep pick up steam. The increase the first year didn't seem so big because of the immense savings that were put in place prior. But why the sizable jump the next year?
Remember that roof that we mentioned that Bill had replaced previously? Hail claims are the number one type of homeowners insurance claims in the state of Texas. And it's not even close really. As a result, the home insurance companies are always looking at the data associated with those claims. They have realized that the age of the roof is one of the single biggest predictors of hail claims after the location of your home. So the price will go up as the roof ages.
In a similar fashion, the age of your home will play a part in this process. We explained to Bill that just like his house was kind of like his body. Teenage Bill didn't break as easily as middle aged Bill. Middle age Bill used his health insurance quite a bit now because things were breaking, and so his home was simply following the same path. Most Texans get it. They may not like it, but they get it.
So there are other factors in play here. One huge factor that people don't like at all is the pricing scheme where someone introduces a new policy to market with overly discounted pricing. Over time, the home insurance company will aggressively push prices up to where they should have been in the first place. This feels a lot like a bait and switch to a Texas homeowner. And we wholeheartedly agree with you! But this is very much a common practice with not only home insurance companies, but other industries as well with teaser rates.
The other big three that we see having the biggest effect on pricing are listed below.
The reality for Bill, and all Texas home owners is that they need to evaluate shopping their home insurance about every three to five years. That will allow you to maximize discounts that come with having longevity with a company, while also keeping these natural price increases in check. Working with a local independent insurance agent will allow you to shop the entire market place with minimal effort on your part. The agents at Insurance For Texans would love to help with that process. Just click the image below to see what we can do for you!