Ever wonder why your Homeowners Insurance has increased so drastically in the last 5 years. One main culprit; HAIL. Hail is a vulgar four letter word in the insurance industry. In the state of Minnesota, Hail is the reason our home insurance rates have increase by over 200% since the year 2001.
Home Insurance companies have tried to rate for it and have been unsuccessful in doing so. Increasing insurance rates is not the answer. Hoping that it wont hail is not the answer either. Insurance companies have now shifted to adjusting that coverage directly associated with wind/hail damage claims as a way to share the insurance risk with the customer. Increasing wind/hail deductibles, limiting siding and roofing coverage and converting a roof to an Actual Cash Value Replacement are just some of the ways that insurance companies have tried to mitigate their risk of paying larger claims.
Large Hail Claims
There were just under 50,000 hail claims in 2019 and this was a slow year for the state of Minnesota. Thankfully, these storms were smaller in size and did not produce a lot of property damage. When the larger storms hit, the insurance companies lose money. When the insurance companies lose money, they charge more premiums and reduce coverage. Don’t kill the messenger. But that is the cycle that we are in.
Review Home Insurance Policy
Take a look at your declaration page every year on your home insurance policy has changed. Look at the deductible. Look to see if there is an Roof ACV, which stands for Actual Cash Value. This changes means that you will not be able to replace your roof. Your roof will be depreciated and devalued. Ask your insurance agent or insurance company to review your policy with you.