Why Your Home Insurance Premiums Are Going Up AND What To Do About It

If you haven’t received a homeowner’s insurance increase this year or received notice of loss of coverage, count yourself some of the lucky few. As you know, California has struggled with increased wildfire risk in recent years, in addition to skyrocketing inflation which has led to a significant increase of construction costs and construction materials costs. Insurance companies, trying to stay profitable and still keep service standards to its customers have been forced to make some hard decisions. Notably, State Farm announced in May of this year that they would no longer take new applications for homeowners insurance in California due to “rapidly growing catastrophe exposure”. In addition, they have requested from the California Department of Insurance an increase in existing home policy pricing up an average of 28.1%. Allstate also stopped issuing any new policies for home and commercial insurance in California last year and has requested a whopping 40% policy price increase from the State. So what can you do as a homeowner?

1. Shop around for your insurance- We are hearing of drastic increases in homeowner’s insurance costs by some carriers in the Santa Clarita Valley, especially if you are near any natural hillside that may be considered a high fire zone. Don’t assume that what you are being offered is the going rate. Talk to your neighbors and local friends about who they have found success getting insured with, or call us and we can send you insurance companies our clients have had luck with. 

2. Budget for a large increase in your policy- If you haven’t received a bill for an increase in your policy amount yet, or even if you received a moderate increase, be prepared there may be more of increase next year. Do yourself a favor and start budgeting to set aside extra cash to cover the increase to your premium.

3. If you are planning on selling your home, understand it can impact the value of your home- We have already been seeing homes fall out of escrow when the buyer gets a quote on home insurance. It is pushing some buyers past their affordability depending on the house and its location. We can work with you to get quotes on your house before you sell to help make sure any potential buyers know the costs before any offers are submitted on your home, hopefully alleviating any issues that may arise. 

With some of the big insurance companies stepping away from the California insurance market, it will be interesting to see how it will continue to impact insurance premiums and insurability in the next few years. No matter what happens, we are here to help guide you through any problems that you come upon. Give us a call at 661-254-1650 and we will direct you to a few insurance brokers that can help answer your questions and help you find a policy that could work for you.

by: Jessica Frank

The Cat and Paul Humphries Real Estate Team is the #1 Keller Williams Real Estate Team in the Santa Clarita Valley and surrounding communities.  If you would like to receive our newsletter with more articles like this that feature real estate, things to do, where to go and what to eat in the Santa Clarita Valley, please subscribe to our newsletter at the top of the page.