HOT PURSUIT

From dealing with pests and rodents to pesky problems with appliances and other household issues, home ownership can often prove to be a challenging time that wears on a person’s patience.

Add financial strain into the mix like homeowner’s insurance that’s out to drain my pocketbook.

I pay my homeowner’s insurance annually about this time of the year. Imagine my horror when I opened the policy the other day to find next year’s premium is skyrocketing by almost 75%. I almost felt like I needed life support as my heart nearly stopped. It for sure skipped a couple beats.

I immediately began calling around to different insurance companies to see if they could help me out of my terrible household dilemma. Instead, I think they were trying to amuse me with even greater increases than the renewal amount.

One company offered me a policy for about 150% more than I paid last year. A couple of them came in roughly the same as what my current company is seeking.

It was pretty discouraging. In my mind, I’m wondering how companies can even think of asking for such a dramatic rate hike. It would be like me suddenly passing on a subscription rate increase of $52 per year (going from $69 to $120). I wouldn’t even think of it because I know I’d be out of business tomorrow.

But apparently insurance companies operate in a different realm than I do with my business.

Thoughts of selling the house and packing up to move to the hills of Montana crossed my mind. But that sounds like more work than it’s worth.

I reached out to a local insurance agent, who I’ve worked with over the years. She also tried to find the best deal. It didn’t work as her quote came back substantially higher than my other offers.

When I told her how crazy homeowners’ insurance has gotten, she replied: “Yes, unfortunately it has gotten very costly. Plus, mandatory high deductibles. So, less coverage for more money. Not fun to explain the people.”

In the end with my insurance charade, I called my current company and whittled down my coverage to get a more reasonable rate that I can afford. I came out with a higher deductible than I’ve ever had before, and some other line items didn’t survive the chopping block. I ended up with only a 25% jump from last year. Still unsettling but it sure beats the original rate adjustment.

Over the past week, I learned more about insurance than I care to know. Insurance premiums are calculated on two major factors: your overall risk and the cost to replace your home. When outside forces—like inflation, natural disasters, supply chain issues and rising construction costs—impact either or both of those factors, it explains why rates are climbing.

Some reports indicate Minnesotans faced the fifth-highest rise in rates among the 50 states by the end of last year. An analysis shows the average homeowner is forking over more than $500 more to protect their homes.

I fear owning a home is becoming out of reach for many as they go in hot pursuit of the high cost “American Dream.”