2020 and the start of 2021 were fraught with floods, severe winter weather, and wildfires, leading to the question: how might home insurance change in 2021? With a year so impacted by so many global and nationwide events, the home insurance outlook 2021 is a little bleak. In Southern states home insurance premiums have grown exponentially due to hurricanes and floods. In California, Oregon, and other fire-prone states, insurers are cancelling, leaving insurance to be covered by state programs. All of this has resulted in homeowners insurance costs rising nationwide.
You may consequently be asking a few important questions for your area: what affects insurance premiums and how much is homeowners insurance 2021? Why is it that homeowners insurance rates nationwide have been affected by the wildfires, floods, and severe winter storms of the past year? Leading home insurance company The Nowell Agency shares how you can prepare for these home insurance changes in 2021 and provides some homeowners insurance tips to help you better estimate homeowners insurance for your home this year.
Homeowners Insurance Policies 2021
One of the major reasons for the increasing cost of homeowners policies this year is wildfires. The most important place to start is by recognizing that while a standard home insurance policy will cover fire damage, if you live in an area where you are at high risk for wildfires, you need to buy additional wildfire area insurance. An average of 2,500 homes in the U.S. are destroyed every year due to wildfires. 85% of those fires are caused by humans and lightning is another main cause.
The devastation that occurred in 2021 led many insurers to simply cancel related homeowners insurance. The few wildfire insurance companies remaining had to raise homeowners insurance rates in 2021 exponentially. Insurers have cancelled or raised costs partly due to the fact that current rates do not adequately compensate them for financial risks associated with wildfire claims. Lawmakers have proposed a few requirements or incentives for homeowners in order to reduce liability and enable insurance companies to still provide 2021 wildfire insurance coverage. Most wildfire and home insurance companies use wildfire risk scores to determine which homes they’ll cover and how much the premiums will be based upon a general area versus a specific home. This leaves no possibility of lowering your risk score. Suggestions to remedy this include tailoring risk scores to specific homes. This provides the opportunity for homeowners to better safeguard homes from fires in order to drop your score and your homeowners insurance premium. For example, you may rebuild your roof with fire-resistant materials, clear brush and trees from around your home, and so on.
What this means for you, the homeowner, is that it will be harder to find affordable homeowners insurance related to fire, your deductible will be higher, and that your homeowners insurance coverage will likely include less than before. You may, however, be able to make a few changes in order to obtain wildfire insurance or a cheaper homeowners insurance policy. If you live in an area that requires additional wildfire insurance coverage, you may have to participate in a state-funded wildfire policy versus a private policy, depending on the availability of private insurers and their requirements.
Homeowners Insurance Quotes
To learn all about the other two main factors that affect homeowners insurance in 2021, tune in to Part Two of this article (Homeowners Insurance Costs 2021) with a click to the Nowell Agency. There, our expert homeowner insurance brokers share more on everything you need to know about homeowners insurance 2021. Better yet, just give us a call and get a free homeowners insurance quote. Get the coverage and peace of mind you deserve with comprehensive homeowners insurance from the Nowell Agency today.
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The reality of doing business is that your organization is going to face risks. The dangers that threaten your livelihood can result in your business being held accountable for legal and financial responsibilities that can quickly become overwhelming. As a result, many business owners purchase insurance policies for protection against the fallout of such losses. […]