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When you bought your home, you likely did so because of its location, size, design, appliances that were included and other features. Many of those factors are taken into account when you get a homeowners insurance quote, as well as other variables. If you’re wondering, “Why did my homeowners insurance go up?” you are likely unpleasantly surprised. It may be because you built an addition, or because your property increased in value or you filed a claim. Here we’ll help you understand why home insurance rates go up.

Here are common reasons why home insurance rates increase:

  • Your insurer raised rates to cover its cost of doing business
  • You filed a claim or live an area where many others have
  • You added a pool, trampoline, woodstove
  • You’ve added a certain breed of dog to the family
  • You built an addition or did a major renovation
  • Inflation
  • Construction costs in your area increased
  • Your credit score changed for the worse

Your insurance company raised its rates

Insurance companies are businesses, so naturally, they need to make a profit and please their shareholders. That means in some cases your rates will increase because your carrier is charging more to cover their own increasing costs. The frequency and “severity,” or cost, of claims paid out by insurers has a significant impact on their bottom line, and the average home insurance claims cost has been steadily trending upward. Consider these findings from the Insurance Research Council:

  • Average claim severity for all homeowners insurance coverage countrywide increased over the 22-year study period, from $2,676 in 1997 to $12,654 in 2018. That’s a 373% hike.
  • Over the 22-year study period, insurers attributed, on average, 33% of total homeowners claim payments each year to catastrophes.

The main reasons for the upward spiral in claims costs, according the IRC, are:

  • High increases in roofing materials b/c roofing comprises a significant portion of total home claim costs
  • Severe or catastrophic storms
  • An increase in mid-to small storm damage, which comprised a majority of natural disaster-related claims  
  • Higher policyholder deductibles resulting in fewer low-cost claims
  • The growing size and complexity of homes

Filing a claim may hike your rates

When you file a claim to repair or replace your home, it’s likely your rates will increase. How much your rates go up for filing a home insurance claim will depend on whether it was a minor fix or a major replacement or rebuild.

Here is how much home insurances premiums increase, on average, for common claims:

Claim typeAverage % increase$ increaseAverage % increase for two claims$ increase

But you may have not filed a claim, and are still seeing higher coverage costs. That’s because what you pay is also impacted by the severity and frequency of claims filed by your neighbors. If you live in an area prone to theft and severe weather damage, your insurance may go up even if you haven’t filed a claim but those in your community have.

The claims history on your property is also taken into account.

Pool, trampoline, wood stove

Maybe you’ve added a swimming pool, trampoline or wood stove to your property. These are called “attractive nuisances” by insurance providers. Your insurer will consider your home to be a higher risk compared to homes without these things. That means you may see your homeowners policy rates rise.

A pool or trampoline will increase your rate by an average of 8%, or about $155 a year.  A woodstove in your home ticks up costs by 4%, or about $90 a year. If you have added one of these to your home, you may be tempted not to tell your carrier to avoid paying more. You wouldn’t be alone. conducted a recent survey of 1,000 homeowners and found that 13% acknowledged not notifying their insurance company after adding a pool. A third (33%) of those surveyed who bought a trampoline didn’t tell their insurance company. Don’t be one of these homeowners. Failing to notify your insurer means if there is an injury or damage done from one of these items, you won’t be covered and will have to pay for the repairs yourself.

Dogs considered high-risk for biting

Dog-bite claims are common and costly.

  • The average cost per claim in 2020 is up 162% from 2003, according to the Insurance Information Institute.
  • The average cost per claim for dog bites jumped 12% from 2019 to 2020. The average cost per claim increased 162% from 2003 to last year.
  • The average claim last year was $50,245, according to the III and State Farm.

So, if you’ve added a dog to the family, depending on the breed, your state laws and your insurance company, you may also pay more. Some insurance providers won’t boost rates for any type of dog breed, while others do, or may deny you coverage altogether. Two states, Pennsylvania and Michigan, however, have laws prohibiting insurance providers from denying or canceling coverage for specific breeds.

Like trampolines, woodstoves and pools, you should notify your insurance agent or company if you’ve adopted a dog, to be sure it isn’t a breed deemed high-risk. You should tell your insurer. We found 43% of people in our survey didn’t tell their insurance company after adopting a dog.

You've made improvements to your home

In general, if your property value goes up, you may see an increase in insurance costs. It’s important to note that insurers base the value of your home on what it would cost to repair or build it with similar materials, if you have replacement value which is most common -- not what you would sell it for on the market. Typically, renovations, like additions and renovations improve the value of your home, so you are likely to see an increase.

One factor that affects homeowners insurance rates is your home’s square footage. So, for example, if an addition expands the footprint of your house, your rates may go up. Or, let’s say you remodeled your kitchen. It will cost more to replace the new -- and more expensive – amenities, per square foot, so you may see a hike in your rates.

Your home's value increases as it ages

Homes generally appreciate in value, so replacement cost tends to increase over time. As a result, the amount of insurance you need to purchase to fully cover your home goes up over time, said Dale Riemer, American Family personal lines pricing director. For example, you may insure your home for $200,000 in year one, $210,000 in year two, and so on. This need for additional insurance results in additional premium. "For American Family, historically replacement cost values increase by about 3% to 6% per year, which can vary by geography. These increases in replacement cost roughly translate to premium increases of 2% to 4% historically," said Riemer. "This being said, we are in a unique time - since Q3 last year, lumber costs have skyrocketed, and contractor costs have increased more than usual as well.  As result, the historical 3% to 6% increase in replacement cost stated above has been most recently in the range of 8% to 11%, resulting in higher premium increases in the neighborhood of 5% to 8%. It’s unclear how long these elevated increases in replacement costs will persist. To conclude this first item, these increases in values of property usually happen every year, and have nothing to do with whether or not an insurance company changes their rates. In other words, insureds premiums are going up because they’re purchasing more insurance."


You may find your home insurance keeps going up even if you haven’t made any changes to your property. Inflation is one big reason why premiums may increase. The reason why that happens is because the cost to replace your home’s contents will be more this year than it was last year. So, for example, if you filed a claim to repair or replace your belongings three years after you bought a policy, the cost to your insurer will be more than when your coverage went into effect. Insurance companies use the Consumer Price Index to measure inflation and then adjust their rates based on that information.

So, how much do rates go up due to inflation? There are many variables that come into play. "There’s the inflation of claim costs. This is partially offset by premiums that also tend to increase. The net result of these two generally falls in the range of 2% to 4%. In other words, the cost of claims increases by 2% to 4% more than the amount by which premiums tend to increase," said Riemer. "This is the amount which American Family would increase its rates annually, if we were in a stable state, and our previous rates were fully adequate, both of which are not always the case."

He noted that there are other things that can cause premiums to increase." For example, customers often qualify for discounts that can reduce over time.  A few examples are a new home discount and new roof discount.  When a home and/or roof is brand new, they perform very well, and discounts are the largest.  As homes and roofs age, they become more susceptible to weather losses, and therefore discounts go down over time. As discounts decrease, premiums increase. For all of the reasons mentioned above, it’s really difficult to provide a single number that applies to all. In other words, every policy and geography is unique."

Your credit score dropped

When you file a claim, your home insurance premiums  are likely to go up more than almost anything else. The one surcharge higher than filing claims is if you have bad credit. Nearly every state allows insurers to use a person’s credit history when devising rates. Not every insurer considers credit, but those that do raise rates substantially for people with poor credit.

The national average percentage increase for homeowners with bad credit is 127% more than those with excellent credit. That’s an average annual $1,703 home insurance premium increase. The increase for bad credit varies by state. Ohio and Indiana homeowners with poor credit pay 270% more than those with excellent scores. Other states, including California, Hawaii and Massachusetts, don’t allow the practice. A state like Florida allows insurers to partially base rates on credit history, but homeowners with poor credit only pay on average 3.6% more than people with excellent credit. It’s not only people with poor credit who pay more. Homeowners with fair credit pay on average 34% or $425 more than those with excellent credit.

"Credit is a much-debated rating factor, but it is allowed in most states as insurers have shown statistically that those with lower credit ratings tend to make more claims," says Penny Gusner, senior consumer analyst for

Factors that can make home insurance rates go down

Now that we’ve covered common reasons for you insurance premium increasing, let’s look at how some factors that affect home insurance rates can result in rates going down for some good news.  When you’d see the decrease would depend on the timing. Some of these variables, for instance, the materials of your home, would be accounted for when you buy a policy; your rate wouldn’t keep going down after that. Others, such as an upgrade, may lower your rate after you bought the policy.  Chief among them are:

  • Your home’s materials: Having masonry or masonry-veneer construction or fire resistive construction could save you 6% to 10%, on average.    
  • Your distance to a fire station: You could save about 15% on a home insurance policy if your home is located less than five miles from a fire station.
  • Upgrades: Electrical, plumbing and heating upgrades if done altogether can save you an average of 13%, or around 5% if done separately, on your insurance costs. For a roof upgrade it’s 11%.

There are also home insurance discounts that don’t involve your property at all that will lower your rates, such as bundling with your auto insurance, paying in full, paying electronically and staying with the same carrier for a number of years.

How to lower your home insurance rates

Regardless of whether your rates have gone up or down recently, there are ways to lower what you’re paying but still protect your home and belongings in the event you have to file a claim. Here’s how:

Comparison shop – Comparing home insurance company quotes at least once a year prior to renewal is the best way to save money on your policy. The price for the same house and amount of coverage will vary significantly among insurers. That’s because each uses its own unique method for assessing your homeowner profile and associated risk and determining what you pay. You should compare quotes from at least three companies for the same amount of coverage. Be sure to also read customer satisfaction reviews, including’s Best Homeowners Insurance Companies findings for 2021, which asked customers to rate their providers. That way you aren’t sacrificing service and optimal coverage for cheap rates.

Deductibles – Choosing a higher deductible typically lowers your premium on insurance policies.

Discounts – As touched on before, getting all the discounts you qualify for can net price savings. Be sure to ask your insurer what’s offered so you can maximize your discount savings.