Homeowners Insurance Costs 2021

If you read Part One (Home Insurance Increases 2021), you’ll remember that The Nowell Agency is sharing the reasons for rate hikes in homeowners insurance 2021, as well as tips to find the best home insurance rates in light of these increases.

A major component of rising insurance premiums in 2021 was the raging wildfires in California, Washington, and Oregon. That resulted in a shortage of insurers and increased cost of home insurance. There are two other main reasons for the cost increases of home insurance policies in 2021: severe winter storms and floods. 

Homeowner Insurance Coverage 2021

The severe winter storms that hit the Southern states in early 2021 have already impacted homeowners policies. Many homeowners were left shocked and dismayed at the lack of claims they could make for the unexpected damage wreaked by these winter storms. Snow, water, and ice caused property and home damage that wasn’t usual for the area and therefore not covered in a standard homeowners insurance policy. This left many residents to wonder what does home insurance cover? The inadequate coverage has also led many insurers to reassess their 2021 homeowners insurance plans and determine what homeowners need to add in order to cover these missing elements.

What does all this mean for you? Extra coverage leads to greater cost for the insurance companies, resulting in higher premiums and deductibles for you. You will most likely have to shop around to find the most comprehensive home insurance policies. In order to ensure your home is protected, you need to know what home insurance typically covers and what weather insurance coverage your insurer includes. Knowledgeable Nowell Agency team members encourage you to find a home insurance policy that includes:

• Snow damage coverage: The heavy weight of the snow or ice covering your roof is a big concern, so make sure your plan covers this and any possible resulting water damage.
• Falling trees coverage: Nearby trees could crack and fall, landing on your house or your car. The resulting damage and cleanup can be expensive so make sure your homeowners plan covers falling trees.
• Burst pipes insurance coverage: Many areas dealing with freezing temperatures for the first time resulted with burst pipes. As this was not common for those areas, insurance plans did not cover this. Make sure your 2021 homeowners insurance plan covers water pipes and water damage.
• Spoiled food coverage: Overloaded circuits due to freezing weather can lead to power outages. While a standard home insurance policy typically covers food that spoils due to power outages, the limit is usually very low, leaving the main cost to you.
• Additional living expenses coverage: Homeowners insurance will likely cover hotel bills, restaurant meals, clothing, and other expenses when you have to leave your home due to a disaster that’s covered by your policy. However, some plans do not include power outages or various other disasters in this, so find a plan that covers it all, as this can get costly.

Of course, adding these vital coverages increases costs for insurance companies and consequently, for you. Yet if you’re hit with any of these occurrences, the cost upon you if you’re not properly insured will go far beyond the hikes in your home insurance premium. 

What Does Homeowners Insurance Cover?

There were several changes in flood insurance rates in 2021 resulting from recent floods across the Southern United States. Hurricanes and severe winter weather caused flood insurance rates to increase. Overall, there is an average country-wide flood insurance rate increase of 10.2%. The most impacted in NFIP areas are non-primary homes (secondary, seasonal, and rental properties) which will increase about 23% in their premiums.

Some of the positive changes that are coming about include changes to NFIP rules. Now homeowners are able to switch to private market flood insurance companies. Additionally, NFIP policies which formerly limited flood insurance coverage can now be expanded by adding private flood insurance to NFIP or replacing it completely. 

Another major component of flood insurance changes in 2021 has to do with a new risk assessment and rating structure by FEMA due to their assertion that flood insurance prices have been off for years. This will enable flood insurance premiums to be tied directly to actual flood risk, rather than an umbrella effect. This may lower some individual flood insurance policies, but overall, flood insurance costs will likely continue to increase over the next few decades. This is due to increased flood risks from rising sea levels, climate change and rapid coastal development. 

What does this mean for you? If you live in an NFIP area, you may save on premiums, depending on your home’s assessed risk, and increase your overall coverage with private insurance. In all other areas, overall cost increases in flood insurance policies will result in higher premiums and deductibles.

Home Insurance Policies 2021

The Nowell Agency hopes this information better equips you to choose a Mississippi homeowners insurance plan that covers everything you need. Experienced brokers at The Nowell Agency are standing by to meet with you and find an affordable homeowners insurance policy that is specific to your needs. Call or click for a free insurance quote today!