Household contents insurance Saving tips for climate change

The disastrous weather last year could lead to higher home insurance premiums in 2022. However, some climate-related measures that are being taken now may help reduce your chances of a rate hike this year and improve the experience of making your insurance claims after a year’s “weather event.”

The high cost of claims settlement for the eighteen major weather disasters in 2021 – each of which exceeded $ 1 billion in damage – is one of the reasons your home insurance premiums are likely to increase this year, experts say. And research suggests that 2022 could bring more of it – for example, a United Nations report from August 2021 predicts more intense rainfall and sustained sea level rise with the associated flooding in the coming years. Weather-independent factors such as higher repair and replacement costs for houses are also putting upward pressure on premiums.

“I don’t think this is an era where prices will come down,” said Robb Lanham, chief sales officer of HUB International Personal Insurance. Rather, he says it is an ideal environment “for an insurance company to say:” To be a sustainable company, we have to raise our prices. “”

It’s wise to ask your insurance company or agent about a possible increase in your rate in 2022, Lanham says, and what might be behind the increase. If weather risk is one of the factors, these three steps can help at least hold your insurance bills and better prepare you to quickly collect a weather damage claim.

Spend to weatherproof your property

In many cases, investing in weather protection for your home to reduce damage can pay off in the form of a lower premium or at least a lower increase in 2022.

“Many of the big hauliers offer discounts for a number of mitigation factors,” says Lajdziak, including those related to weather damage.

New windows that better protect your home can be a good long-term investment, especially in areas where hurricanes are frequent and insurance discounts are common. “New windows may cost $ 10,000, but they could save $ 2,000 in premiums annually,” Lanham says.

Homeowners in drought-affected areas at risk of forest fires should “harden” their structures and properties by using materials and building structures that are less likely to catch and spread fire. While this can help lower the cost of home insurance, it naturally also reduces the risk of forest fire damage to a home.

Some high net worth homeowners in fire areas have even gone so far as to install “sprinkler” systems that spray structures with extinguishing foam to retard flames. In other cases, the solution can be as simple as landscaping. For example, insurers cite more flammable Italian cypress trees and wood mulch as factors that can contribute to higher premiums.

If you have flood insurance or are considering taking out a policy, another damage control strategy – and insurance savings – is to raise a sunken property to limit potential flood damage.

Check your contract extension for climate-related coverage adjustments

As if the prospect of higher premiums wasn’t bad enough, Lanham says there is a growing risk that your coverage will be tacitly adjusted so that you may stay shorter than expected after a weather-related incident.

The industry, he says, is increasingly beginning to offer “stripped-down guidelines”. “This can result in policy changes – such as adjustments to the deductibles for wind damage caused by hurricanes – which can affect the amount or the success of an insurance statement.

Such weather-related deductibles deserve attention even if your policy doesn’t change as they differ from the standard $ 500 or $ 1,000 amounts that apply when you claim other risks. In coastal areas, policies for named storms can have a separate, higher deductible. In some cases, he says, the deductible isn’t a flat dollar amount, but rather a percentage – sometimes up to 5% – of the cost of the total insured value of the property. “It could be a substantial deductible if it’s a named storm,” he says.

In addition, it is important to understand how water damage is and is not covered by your home insurance as this is a common area of ​​confusion according to professionals. In short, you are protected from water leaking directly into your home, like rain falling through a broken window. However, if the water hits the ground before it reaches your home, you will need flood insurance to cover the resulting damage.

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Benefit from more options for quick claims processing

Repeated storms have led insurers to invest in technology to make the claims process easier – for you and them – and more efficient.

These “DIY” tools are being introduced to streamline both home and auto insurance claims, and they really help speed the process: A recent study found that 60% of claims filed online are processed within a week, compared to less than half of those initiated by phone. In some cases, you can even receive claims payments electronically.

Many of these tools can be built into the insurer’s mobile app. (Most major freight forwarders today have smartphone apps.) After an event, the owner or policyholder can take, upload, and submit photos of the damage. This speeds up the process, while it can be very time consuming for a claims adjuster to physically assess the damage, especially in the case of widespread natural disasters that damage many homes at the same time and make access difficult or impossible for a period of time.

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