If you haven’t taken notice, homeowners insurance rates have been at their peak for the last few years. A lot of this has to do with the increased cost of goods and inflation. These increase day by day.

Homeowners insurance rates are affected by your loyalty. Here, loyalty consists of how long you stay with your insurance company. When you switch from one insurance company to another, whether it be every six months or a year, the new insurance company can see that on your record and will determine that you are treacherous. If you are notorious for doing, just know that it will definitely affect your rates down the road.

Since a hurricane has not occurred in over a decade, the probability of a hurricane hitting is higher than ever. It’s nearly impossible to determine mother nature and when she will strike. Giving insurance companies an advantage to maximize their rates. The reasoning for this is to ensure that if a hurricane does occur and it were to cause billions of dollars of damage, that they are able to use this premium to deal with the cost of future damage.

Insurance companies determine these increased rates by looking at various factors such as, the financial viability of a person and their previous insurance record. If they see that you have been struggling to pay your mortgage, have multiple claims, or are involved in multiple accidents, they most likely will not offer you their best coverage.

Insurance companies claim that due to the increased cost of goods and services today, it costs them more to mend a house that has been damaged by a storm, then it had in the past. A lot of people are involved in insurance fraud, which puts a burden on the insurance company. Hence, forcing them to make up for the loss from potential or existing clients. This then results in increased rates.

Furthermore, people nowadays have more things to insure such as, expensive houses or cars. The more expensive an item, the higher the insurance rate will be. Insurance companies invest their money into the stock and bond markets which allows them to receive interest on their investment.

Throughout the past few years, the interest they have been receiving is considerably low. This has resulted in them having to compensate through insurers by raising their insurance rates. With all of these factors combined, they have resulted in a hike in insurance rates becoming a burden for insurers to cope with increased rates.