Last year’s disastrous weather could spell higher premiums for home insurance in 2022. Yet a few climate-related moves taken now may help limit your odds of a rate hike this year, as well as improve the experience of making a claim on your policy after a “weather event.”
The high cost of settling claims for 2021’s eighteen major weather disasters – each of which exceeded $1 billion in damages – are among the reasons a hike in your home insurance premiums is likely this year, experts say. And research suggests 2022 may bring more of the same – for example, an August 2021 United Nations report in the years ahead forecasts more intense rainfall and continued sea-level rises, with associated flooding. Non-weather factors, such as higher costs to repair and replace homes, are also putting upward pressure on premiums.
“I don’t think this is an era where prices are going to go down,” says Robb Lanham, chief sales officer for HUB International Personal Insurance. Rather, he says, it’s an ideal environment “for an insurance company to say, ‘For us to be a viable company, we have to raise our rates.’”
It’s smart to ask your insurance company or agent about a possible rise in your rate in 2022, Lanham says, and what may be behind any hike. If weather risk is among the factors, these three moves may help to at least hold the line on your insurance bills, as well as better prepare you to collect quickly on a claim for weather damage.
Spend to weatherproof your property
In many cases, investing in weatherproofing your home to mitigate damage can pay off in the form of a lower premium, or at least a lower increase in 2022.
“Many of the large carriers offer discounts for a number of mitigation factors,” Lajdziak says, including those related to weather damage.
New windows that better protect your home might be a good long-term investment, especially in areas where hurricanes are common and insurance discounts frequent. “New windows may cost you $10,000, but could save you $2,000 annually” in premiums, Lanham says.
Homeowners in drought-stricken areas exposed to wildfire risk should “harden” their structures and properties by using materials and building designs that are less likely to catch and spread fire. While this can help lower homeowners insurance costs, it of course also reduces the risk of wildfire damage to a home in the first place.
Some high-net-worth homeowners in fire zones have gone so far as to install “sprinkler” systems that spray structures with firefighting foam to retard flames. In other cases, the fix might be as simple as landscaping. For instance, insurers flag more-flammable Italian cypress trees and wood mulch as factors that can contribute to higher premiums.</…….