Wondering why your home and auto insurance rates have increased? Join the club.

If you live in Texas, you’ve probably experienced an increase in your home and auto insurance rates recently. If so, you are not alone. I get this question all the time. Why did my premium go up? The truth is, the answer is not that simple. Many factors contribute to rate increases and not all companies look the same data in determining your premium. What one company deems high risk might be a non issue with another company. Take time to consider these key factors affecting your rates when reevaluating your insurance needs for 2019.

1. Texas is big, and our population is growing.

Like the saying goes, “in Texas everything is bigger.” Well that is true even with insurance premiums, unfortunately. Because Texas is so expansive, we have more people, 28.31 million to be exact. With more people come more automobiles, more homes and more risks. For this reason, we rank as one of the most expensive states for home and auto insurance.

We like our cars, a lot.

According to The Zebra insurance search engine, we pay 26.8% more for car insurance than the Americans in other states, which equals out to be roughly $1,827 a year. In fact, Texas is the eighth most expensive state for car insurance. Several factors such as age, marital status, miles driven yearly, credit score and even education level can affect your home and auto rate. Make sure your insurance company is aware of life changes as they happen to take advantage of possible savings. If you own a classic car or motorcycle, a common mistake many drivers make is including it on the same insurance policy as your daily-use vehicles. Placing classics with companies that specialize in classic car insurance can save you a lot of money on premiums.

More Texans means higher premiums.

Texas homeowners have also experienced insurance rate increases. This can be blamed partly on population growth. JP Morgan Chase and Toyota are among the many businesses who have relocated to Texas because of our statewide business-friendly regulations and low cost of living. The Dallas Business Journal recently reported that 75 companies have relocated to Dallas-Fort Worth in the last seven years. With these companies come a lot of new residents who need a place to live. So much so, Texas is experiencing somewhat of a housing inventory shortage. Despite this lag in home sales, the Texas housing market continues to break records when compared to the rest of the country. An increase in population, however, means more risks. As a result, your premiums go up.

Don’t overlook replacement costs.

Many times homeowners neglect to look at the details of their home insurance policy. In the hustle and bustle of life, many times we don’t read the fine print. A key factor affecting your premium is your replacement cost ( or home value). Be sure your insurance agent carefully considers the cost of replacing your home when buying insurance. Do you have wood floors or carpet? Are your kitchen cabinets builder grade or custom? Did you do any remodeling or add any structures to your property in the last year? All these questions and many more should be asked by your insurance agent to ensure your home value is accurately calculated. When a loss occurs, it is too late.

Increased insurance rates can be a result of errors in estimating replacement cost as well. Only your house, or dwelling, should be insured, not your land. Make sure land value is not included in the total property value of your home when you are presented with a home insurance quote. Looking up your home and land values on your county’s central appraisal district site can help in choosing coverage that is right for you.

2. Texas weather is unpredictable, and its seven diverse regions contribute to increased rates.

Texas weather is fickle. If you live in the Lone Star State, you have probably experienced all four seasons in one week at some point. In fact, this week will be one of them if weather reports are accurate. Texas is not just big, but also diverse in its typography. So diverse that it is divided into seven regions. These regions (Big Bend Country, Gulf Coast, Hill Country, Panhandle, Pineywoods, Prairies and Lakes and South Texas Plains) all present very different weather risks. These risks affect home and auto insurance rates for all Texans. With the Gulf Coast, we see hurricanes, like Harvey in 2017. Unlike the rest of Texas, the Panhandle has snow and dust storms yearly. The Big Bend region borders Mexico and contains the Chisos Mountain range and the Chihuahuan Desert. To adequately discuss the weather risks associated with the Big Bend region would warrant a blog all in itself.

To sum it up, Texas weather is unpredictable. When one region is hit, we all pay. After a huge weather event, insurance companies must recoup their losses. As a result, rates increase for all of us. In addition, the costs or rebuilding after major weather events can cause building supplies and labor to be in short supply, furthering the demand and costs of rebuilding.

3. You are at the mercy of your neighbors.

Unfortunately, what your neighbors do matter to insurance companies. If your zip code has seen an increase in crime, your insurance rate will increase. Homeowner associations and neighborhood watch groups do more than keep you safe and your neighborhood attractive. They also contribute to keeping the insurance rate low in your zip code. Choosing a home in a neighborhood with an HOA or or a strong neighborhood watch group are both good deterrents for increased home and auto insurance rates.

Likewise, insurance companies track weather claims . Insurers price weather risks based on historical data they gather from small geographical areas. If your neighborhood has a history of consecutive losses due to hail damage, for example, insurance companies will take note. Your home and auto insurance rates may increase one year and decrease the next depending on the amount of claims made in your geographical area.

4. You are in charge, not your insurance company.

What can you do to keep your home and auto premiums low? The most important thing you can do is realize you are in control and you have choices when buying insurance. Choose to work with an independent agent who will shop your rates each year. This will give you confidence that you have the best coverage on the market at the best value. Unlike a captive agent who works for only one company, an independent agent works for you. An independent agent understands that everyone’s claim history is unique, and circumstances change regularly. So it is their job to regularly evaluate and reevaluate your needs and fit you with an insurance company that can best cover your unique set of risks, as they change. Having an agent who knows you and will advocate for you when a major loss occurs can save you an immeasurable amount of money, time and worry in the future.