In yet another blow in the wake of the global crisis, people have yet another burdening cost to home ownership. Customers are now turning to insurance companies who offer better bundling, home security and home safety and other discounts to outweigh the rising cost of homeowners insurance.
According to HomeInsurance.com, home insurance rates have steadily increased over the past years with more than 42 percent of U.S. homeowners reporting a premium increase in 2008. Storms making landfall in the U.S. are the leading cause and have forced many insurance companies to increase rates or declined coverage in coastal regions and areas that are prone to natural catastrophes. Many companies have put limited coverage to fire and earthquake clauses excluding flood and theft in storm-prone areas.
With the unemployment rate at an all-time since the Great Depression and the mortgage crisis right in the middle of the economic recession, homeowners are feeling the burden of insurance rate hikes more than ever. In some cases, homeowners are stripping down insurance coverage to a bare minimum or even worse, no coverage at all.
In 2008, a study by J.D. Power and Associates shows that satisfaction levels among home insurance customers have steadily decreased in a 5-year period in a direct correlation with rising home insurance rates. Most insurance companies have either increased rates or downgraded coverage for the usual premium paid by customers.
Additional data from a 2008 survey on HomeInsurance.com reported that 91 percent of respondents were unaware of what discounts they were taking advantage of on their homeowners policy. Some have not realized that addition of fire safety systems and warning devices can actually bring down the premium of their policies.
Recently, homeowners are growing more awareness of the benefits of home insurance discounts and experts expect satisfaction levels to increase. In the same 2008 J.D. Power and Associates study, customers who bundled their policies with other benefits reported being more satisfied with their homeowners insurance than those who have separated benefits from their coverage.
According to Carlos Lagomarsino, CEO of HomeInsurance.com,bundling home and auto insurance policies with one company often allows homeowners to save 10 percent to 30 percent on their homeowners policy. These are simple cost saving tips that some insurance companies do not elaborate.
As awareness grows, so does inquiries by homeowners for home security and home safety discounts. Additional savings ranging from 10 percent to 15 percent are offered to homeowners who have deadbolts, home security systems, fire alarms and/or fire extinguishers.