California has always been an expensive place to live, but it’s getting worse because of how often wildfires happen and how much it costs to rebuild. Homeowners are already seeing their insurance rates go up, and these increases may not end any time soon.
Which companies are going to charge more?
Home insurance company State Farm has stopped selling new plans in California because of the high risk of wildfires and the high cost of rebuilding. It also wants to raise rates on existing policies by 30%, on top of the 20% increase that was passed in December.
Allstate wants to raise the rates on its policies by 34%, and Farmers is also putting a cap on the number of new policies it will sell, just like State Farm.
The California Department of Insurance has not yet decided these rate hikes. Homeowners may not have as many choices if other insurance companies leave the market. But there are things that homeowners can do to keep prices down.
What can people in California do?
Look around: Find out what three to five insurance companies will charge you. Price is important, but you should also look at the service and read reviews from other customers.
Use materials that won’t catch fire. If you’re building or remodeling, use materials that won’t catch fire. Because of this, there is less chance of burning damage, and your insurance company may give you a discount. Get in touch with insurance companies to find out what kinds of things can save you money.
Pick a bigger deductible. A higher deductible can lower your monthly premiums, but if you need to make a claim, you will have to pay more out of your own pocket. Put this money away in a high-yield savings account before you raise your deductible.
When lowering the area, be careful
It might not be a good idea to cut back on service to save money, especially in places where lightning strikes often. If your home is destroyed and you don’t have enough security, you could end up paying a lot of money out of your pocket. Before you buy a policy, make sure it covers at least 80% of the cost to rebuild your house. To keep up with rising building costs, you should review and change your coverage often.
By doing these things, homeowners can better control their insurance costs and make sure they are adequately protected against possible threats.
