Homeowner Rates and Claims Rising?

Following the October 2010 storm that raged through the valley of the sun many Arizona homeowner insurance companies raised rates.

Literally thousands of roofs needed repaired or replaced. At our home we had probably a dozen or more roofing companies knock on our door asking us to let them replace our roof and bill the insurance carrier. While our roof suffered from some dings we declined to file a claim.

Yet, many homeowners did file claims. Just in our surrounding neighborhood area I bet there were 20 homes that got new and improved roofs. And that is just within a few block area.

But the major wind and hail storm that damaged thousands of homes to varying degrees is not the only reason insurance carriers are ratcheting up rates.

The Economy to Blame?

The economy is leaving insurance companies struggling to find ways to make money on their investments. Insurance companies usually prefer safe places to store money, where the risk and reward are equally conservative.

But those rewarding investment havens are far and few between.

The Bottom Line

All of the above has forced insurance companies to focus on their primary bottom line, which is ensuring their insurance products are profitable. There was a time not long ago where insurance companies were ok breaking even or even losing money, as long as they could recoup profits elsewhere (bonds, for example). Those days, at least for now, are a distant memory.

Most consumers find it hard to believe that insurance companies lose money – yet they often do.

Use an Independent Insurance Agent

And that leads me to my point – if you want to find cheaper insurance consider using an independent insurance agent. We shop around so you don’t have to.

The $100,000 Homeowner Claim

$100,000. That is the size of the water claim that recently happened to someone who owns a home in Arizona. And as you can imagine the insurance carrier was not too thrilled.

After all, they charged this client roughly $500 per year for their Arizona homeowner insurance and will never recoup their money back, no matter how long this person remains a client.

This particular Arizona homeowner is a seasonal client who lives outside Arizona and left the state to return home and their primary residence several thousand miles away.

Unfortunately, this client failed to turn off the water to the home. Normally, they turn all water sources off when leaving town, according to the insured.

A small faucet water hose leading to the toilet or sink cracked and finally broke, freeing up water to spill inside the home for weeks. The damage was sizeable, as you can imagine.

An Arizona homeowner insurance policy will cover you for sudden and accidental losses and this is a perfect example.

If you are going to be away from your residence for any length of time – turn your water off! While you should turn the water off to inside sources you can still keep outside water sources active to water plants.

Follow these simple suggestions:

1) Replace all hoses that are over 5 years old
2) Turn your water off if you will be gone for a length of time
3) Ask a neighbor to stop in daily to check. This is important for water leaks but also for any type of break-in

Also, don’t forget to replace all those water hoses that lead to your toilets, sinks, and washer. Old hoses are usually the culprit to water damage claims.

If you ever decide to change insurance companies they will check your claims history. Doing small things to prevent claims can also save you insurance premiums should you decide to switch carriers some day. But having a monster claim on your record will limit your ability to change insurance in the future.

Arizona Property Taxes

It’s no secret – home values have plummeted.

Does that mean you can lower your property tax assessment? Maybe.

Many real estate agents offer to help homeowners file for a reassessment. But you can do it on your own too. You can buy a property tax reduction guide from “National Taxpayers Union” for $6.95 at www.ntu.org.

When going through the process also be looking for mistakes in how your property is listed – the size of your lot or the number of bathrooms for example.

Do research and find out what comparable homes in your area are selling for – in the same school district, same number of bedrooms and bathrooms and comparable lot size.

The State of Arizona is suffering financially (at the time of this writing). It may take alot of luck to get them to give in but it is certainly worth a try.

Contact us today for a free, no obligation quote on your Arizona Homeowner Insurance.
Gary Brown, Agent/Owner
(480) 659-0229