If you're a Massachusetts homeowner, you may have been taken aback at your most recent homeowners insurance bill, noticing a dramatic increase over last year's premium. And if you've not yet received your bill for next year, you can likely expect between a 6 to 9 percent increase if your homeowners insurance is carried through one of the state's biggest providers. Is there anything you can do to lower your insurance rates or otherwise diminish the effect of this increase on your pocketbook? Read on to learn more about what is causing insurance rates to rise and what you can do to prevent a potential hit to your finances.
Why are Massachusetts insurance rates rising so significantly this year?
Although nearly everyone in the Northeast is accustomed to long, cold winters, the winter of 2014-2015 was a particularly damaging one -- both for homeowners and insurers. Damage caused by snow and ice buildup on roofs was compounded when this snow melted, seeping water through cracks and causing expensive structural problems with the roofs and underlying beams. In an effort to recover some of the costs paid out in claims during this tough winter, at least 13 Massachusetts insurance providers have submitted requests to the Division of Insurance to permit these insurers to impose across-the-board premium increases for customers.
However, some consumer advocates are arguing against these rate increases, stating that they were approved without proper investigation and that insurance rates over the last few years have been more than sufficient to offset last year's unforeseen expenses. While it seems unlikely that the Division of Insurance will revoke its approval for these rate increases, it may take steps to minimize further increases or to require extensive documentation of the necessity of a rate increase for the providers who have substantially raised their rates this year.
Is there anything you can do to reduce your insurance costs in the wake of rising premiums?
If you're facing higher insurance rates, there are a few things you can do to lower your overall premium, even if your company's rate increase remains in place.
First, you'll want to shop around for quotes from other local insurance providers. Although many Massachusetts insurers did raise their rates, others did not -- and a few even lowered rates for all customers. If it's been a few years since you've received a rate quote from another company, you could be pleasantly surprised at the discounts available. If your homeowners and auto insurance policies are with different providers, you could also receive a discount by bundling this coverage.
While you're searching for a better rate, you may also need to take a good look at the coverage you have. If your home's resale value is much higher than the cost to rebuild, you may need to be insured only for the latter amount. In other cases, you could receive a significant discount by raising your deductible, or the amount you'll need to pay toward repairs before your insurance coverage kicks in.
Finally, you'll want to take active measures to reduce your risk of ever filing an insurance claim. Most insurance companies provide a variety of discounts and rate reductions for responsible homeowners. Taking steps like installing heating coils on your roof to melt winter snow buildup, purchasing an in-home fire extinguisher or monitored smoke alarm system, or trimming back dead tree branches that could pose a risk when coated in ice can all help lower your insurance costs. You'll want to check with your insurer to learn more about the discounts and programs that may be able to assist you.