Almost everyone is feeling the pinch of rising home and auto insurance costs this year. Many people are asking why prices are higher and what they can do about it.
Investigator Amy Davis tackles these questions, focusing on what consumers should know about insurance rates right now.
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Why is my insurance going up even after lowering number of cars?
A viewer named Lisa shared that her homeowner’s insurance increased by 73% over last year, despite reducing the number of vehicles in her policy.
Leash Yu from Higginbotham Insurance noted that such a high increase is unusual and could be due to losing discounts or changes in insured rates. Insurance companies consider factors like the age of the roof, the house’s condition, credit rating, and claims history.
If a claim was filed, it might have affected the credit history or discounts.
She suggested consulting a broker to explore options. Leash explained that removing a vehicle from a policy might not always lower rates due to how insurance carriers calculate discounts.
What can do if I am hit by an uninsured driver?
Another viewer, Donna, faced a situation where her vehicle was hit by an uninsured driver. Leash advised that in such cases, filing an uninsured motorist claim or paying out of pocket might be necessary.
“Typically, on an uninsured motorist claim your rates don’t go up with your current carrier. You can run into issues when you shop your insurance, and you have a list of claims filed because it doesn’t look really good from a from a new carrier perspective. And that could definitely affect your rates in your new ability or your underwriting approval on a new carrier.”
Yu says to be prudent when filing claims. If you can afford to pay them out of pocket, I would pay it out of pocket.
He stressed the importance of being prudent when filing claims, as it can affect future rates and underwriting approval.
How can I lower my insurance rates?
- Shop around: You should not accept the first renewal offer from your insurance company.
- Self-insuring: For those struggling with high insurance costs, Leash suggested considering self-insurance by increasing deductibles. This means paying more out of pocket for repairs but potentially saving on premiums.
- Forced place insurance: He also explained forced place insurance, which lenders use to secure collateral when homeowners can’t find coverage.
To lower homeowner’s insurance costs, Leash recommended considering actual cash value coverage for new roofs, which might offer discounts. However, he cautioned that insurance companies have ways to ensure they get their money, so it’s essential to weigh the risks and benefits.
RELATED: How long does an insurance company have to deny or approve a claim?
WATCH: Ask Amy episode: What you should know about insurance rates right now
Do you have a question for Amy? Email AskAmy@kprc.com. Producer Andrea Slaydon also gets these emails!
