Partner, McElhinny Insurance Agency LLC
tim@mcelhinny.com
412.650.5700
Ask ERIE: Why did my neighbor’s homeowners insurance premium go up, without a claim?
Pricing homeowners insurance is complex, and there are probably several reasons behind your neighbor’s homeowners insurance premium increase. They could include:
1. Inflation: Increases in the value of his dwelling, the other structures on his property and the replacement cost of his property would make his premium go up. “Though there’s an increase, it’s really a good thing since it means your property is adequately covered,” says Terry McConnell, ERIE’s vice president and manager, Personal Lines Underwriting.
2. Increased catastrophes: The increased frequency and severity of catastrophes over the past five years have made homeowners prices more volatile than auto insurance prices since you can’t exactly move your home out of harm’s way.
Sometimes, less newsworthy weather events cause the most damage. “People always think of hurricanes when they think of catastrophes, but some of our biggest losses come from thunderstorms, hail, winter storms and tornados,” says McConnell.
Insurers adjust prices based on how much damage your particular state experienced. If your state didn’t suffer much, you can typically expect little or no increase.
3. Construction costs driven by a shortage of materials: Even if a catastrophe occurs on the other side of the country, it can still have implications on your neighbor’s homeowners rate. That’s because widespread damage causes a shortage of building materials, which drives up their price for everyone. (Labor shortages increase the cost of construction projects as well.)
4. Changes in previous discounts: Finally, your neighbor might have seen an increase in his homeowners premium if some of his discounts were reduced or expired. For example, a new home discount will lessen as a home ages.
ERIE offers many home insurance values and discounts to offset any premium increases.* To learn more, visit erieinsurance.com or contact an ERIE Agent.
Insurance question have you stumped? Then email it to Eriesense@erieinsurance.com for possible inclusion in an upcoming Ask ERIE column.
* Discounts are subject to eligibility criteria and applicable rate and rules. Actual savings vary.
Nothing on this Web page constitutes an offer of insurance. Eligibility for
insurance coverage will be determined at the time of application, based
upon the insurer’s underwriting guidelines and rules in effect at that time.
The insurance products referenced in this Web page may be altered by the
insurer at any time. All insurance products are subject to terms, conditions
and exclusions not described on this Web page.
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Coverages cannot be bound or altered via this Web page.
Claims may be reported to Erie Insurance by calling the Erie Insurance
24-hour claim service at 1-800-458-0811
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