Dwelling insurance costs are rising – and these teams are being weeded out – Yahoo Finance

Home insurance prices are rising – and these groups are being eradicated

Two numbers in your life can mean the difference between high home insurance and hundreds of dollars overpaying, a new study says.

According to insurance agency Matic, premiums will rise by an average of 4% across the board in 2021, but your age and creditworthiness could make you suffer more than others.

Fortunately, there is something you can do about both of these problems. This is how you can find out whether you are paying too much for home contents insurance and secure a better tariff for yourself.

The high cost of low credit

Bad credit report with calculator

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In the study, Matic found that low- or medium-credit homeowners faced much higher premiums and much higher price increases.

Those with the lowest scores paid an average of $ 300 more per year than people with large credit, seeing an average increase of $ 85 that year.

FICO score

Average Premium 2019/2020

Average Premium 2020/2021


Less than 580

$ 1,327

$ 1,412



$ 1,237

$ 1,304



$ 1,164

$ 1,208



$ 1,082

$ 1,133


More than 800

$ 1,061

$ 1,098


What's the connection? Many insurers rely on credit information to determine the premiums you pay because research suggests that the factors that lower your credit score (debt, late payments, collections, and bankruptcies) also increase your risk of making an insurance claim.

While some states do not allow companies to use an applicant's creditworthiness in calculating their premiums, your insurer may still calculate an "insurance score" based on similar data on your credit report.

If you don't know your credit history – and you should, if you want to get a decent loan or save money by refinancing your mortgage – you can check it online for free.

There are a few things you can do to improve a lackluster score, but the biggest factors are your payment history and outstanding debt. If high interest rates – like credit cards – are preventing you from paying off your debt, consider paying it off with a low-interest loan.

The story goes on

Seniors struggle at high rates

High angle view of a senior African American couple looking at bills while sitting on the sofa

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While the over 63 age group does not pay the highest premiums – this fate falls on 43 to 55 year olds – they pay much more than they have to.

Matic found seniors overpay an average of $ 751 a year just for not actively monitoring, reviewing, and adjusting their insurance policies.

Age group

Average Premium 2020/2021

Average Save 2020/2021

Under 27

$ 919

$ 329


$ 1,047

$ 389


$ 1,133

$ 454


$ 1,243

$ 625


$ 1,221

$ 573

Over 63

$ 1,183

$ 751

Some insurers offer loyalty discounts to customers who renew with them, but the savings are often tiny compared to the benefits of cheaper shopping.

One of the best ways to save on a home insurance policy is to have lived at home for more than 20 years, Matic says, and people who can capitalize on should make sure their insurer pays them appropriately.

And it's not just seniors who pay too much for their insurance coverage. Matic notes that even those under the age of 27 who pay the lowest overall premiums could save around $ 330 per year by comparing offers.

You can also save on your other insurance policies

Happy black businessman sitting at the desk and looking at the computer screen

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The same comparison buying technique can provide savings on all types of insurance policies.

The insurance information institute recommends comparing at least three offers before deciding which one to choose. There's a good chance you can find the same coverage for a better price.

If you haven't been looking for a better price on your auto insurance lately – even in the past six months – you could be overpaying as much as $ 1,100 a year.

And what about your health insurance? You may be feeling good about your marketplace plan or your work coverage, but it is worth researching to see if you can save a few hundred dollars each year.

After all, the cost of life insurance can vary widely depending on your insurer and the type of policy you have. You might be able to find $ 1 million coverage for as little as $ 1 a day.

This article is for information only and is not intended as advice. It is provided without any guarantee.

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