The other day I received our newest home insurance bill, and I was very shocked when I opened it.
Our home insurance rate jumped from just $650 last year to $1,100 this year, which is a 69% jump.
Yes, nearly SEVENTY PERCENT from the previous bill we received. There was no note or reasoning attached to the bill (I know they don't do that, but it would be nice), all it stated was the new rate.
I know others pay rates much higher than what we're paying, and I guess we've been lucky.
However, considering the fact that we've never filed a claim since we bought our home 5 years ago and that we live in a cheap home, such a big jump in our annual home insurance bill definitely stood out to me.
So, I did some research.
According to ValuePenguin, the average annual home insurance bill in Missouri is $1,022.
This means our new home insurance bill isn't too off, but considering our home is significantly below the average home value in Missouri (our home is 40% cheaper than the average value of a Missouri home stated by Realtor.com), it is still a little odd to me that we are paying so much more than others in the same area.
Also, when we first bought our home, the average home insurance bill in our zip code (we live in St. Louis) was only $450.
What causes home insurance bills to jump or be higher than average?
Around 1.5 years ago, we had two tornadoes in our subdivision.
One was at the beginning of our subdivision, and the other was at the end of it.
It was a freak occurrence and very scary. I'm assuming this is what caused our home insurance to go up. A few houses have been completely rebuilt and they are still working on one or two other homes.
There are other reasons why home insurance bills may be higher as well:
- Do you have dogs? We have two dogs, but neither of them are on the list of “bad dogs” that home insurance companies don't like. It is sad, but certain breeds will lead to higher home insurance.
- Home “additions.” If you have any additions to your home such as a pool or a trampoline, they will most likely add to your home insurance bill.
- Weather. Weather can be a big reason for why your home insurance is higher than usual. If there is the possibility of hurricanes, tornadoes, earthquakes, or other disasters, then your home insurance may be higher than the average.
- How old is everything? When was the last time your plumbing, electrical system, roof, and so on were replaced? If nothing has been replaced in a long time, then you may be looking at higher home insurance rates.
How can you lower your home insurance bill?
There are many things you can try to hopefully decrease your home insurance bill.
Not all of them will work, and some even may make your home insurance rate increase. However, testing it out or going over your options with your home insurance agent can help you out.
Below are different ways to possibly lower your home insurance bill:
Bundle (or unbundle) your insurance. For us, bundling our car and home insurance actually resulted in a higher rate, so we decided to separate the two and we shopped for car insurance separately through a completely different company. We now save around $2,000 a year by buying them through two separate companies, so we, of course, could not say no to that! Even though this method didn't work for us, I know many others who bundle and save a ton of money.
Increase your deductible. Our current home insurance deductible is $1,000. We could increase it, but Im not sure how high of a deductible I would feel comfortable with. What's your home insurance deductible at? I plan on going over this with my insurance agent to see how significant the possible savings would be.
Don't file small claims. I know someone who recently filed a claim for an expense that was just over $1,000. And, their deductible was $1,000. They literally only needed to pay a few dollars, yet they still filed a claim. This will increase your home insurance and it really doesn't make any sense to file the claim anyways…
Look for discounts. There are plenty of discounts you should be looking for when it comes to your home insurance. If you have ceiling or wall sprinklers, secure doors, an alarm, cameras, and more, you may be able to score a cheaper home insurance rate.
What I plan on doing.
Today, I plan on calling my home insurance person to see why it jumped so much (it was probably the tornadoes, but I want to make sure it wasn't a mistake or them trying to take advantage of me), and if there's anything I can do to lower it.
Then, I also plan on shopping around. Right now, we currently have State Farm for our home insurance. We used to have our cars insured through State Farm as well, but the price was astronomical even though we had them bundled. I even tried bundling our home insurance with the current company we have our car insurance through, but that price was even HIGHER than what our current situation is.
So, we plan on shopping and possibly switching to a new home insurance company. I plan on checking with Allstate, Farmers Insurance, USAA, Travelers, Nationwide, and more. Who do you have home insurance through?
How much do you pay for home insurance? Has it jumped?
Have any of your other bills seen a crazy jump recently?
P.S. Voting for the Plutus Awards is almost over. If you could spend 10 seconds and vote for me (all you do is enter your name and email address), I will love you forever!
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