You've heard the saying, ‘the only two constants in life are death and taxes’. As we've seen in the local news, North Carolina insurance companies seek to add escalating homeowners' insurance rates to this list. Citing the estimated replacement costs for homes subject to future weather events and disasters is the justification the insurance companies use for the rate hike. The North Carolina Insurance Commission prudently denied the insurance companies’ request; however, the insurance companies won't take ‘no’ for an answer.

Turning the saying ‘it’s easier to beg for forgiveness than ask for permission’ on its head, some insurance companies now solicit permission from their customers to charge an increased premium as a means of bypassing the insurance commission.  Since a homeowner’s insurance policy is in its most basic form a contract between the homeowner and the insurer, the parties are free to negotiate the terms of the agreement. The insurer can seek permission to charge a higher premium, and the insured may certainly reply, “No, I don’t agree.”  Bear in mind that dropping the insured from coverage is one possible by-product of such a position.

It pays to shop around.

A wise homeowner uses the free-market economy to obtain goods at the best price available. The reasoning is that if you don’t like the price of something at Wal-Mart, Target is right down the street. The same holds true for homeowner’s insurance – a little shopping around can end up saving significant amounts of money. A popular misconception is that a homeowner has to wait for the term of their present policy to expire before switching their coverage. To the contrary, the customer may freely shop around at any point during the year for homeowner’s insurance.

An important consideration when shopping for homeowner’s insurance is obtaining the same coverage as your current/former policy. Ensure that the deductible, replacement coverage, and personal property coverage mirror each other to provide a true ‘apples to apples’ comparison between the two policies. A popular way to decrease your homeowner’s premium is to increase the deductible filed on a claim if, after shopping around, you still find the rate to be too high.

You have a choice.

Years ago, I received a notice from my former insurance carrier notifying me of a premium increase, reasoning that it would take an additional $60,000 to replace my home in the event of a total loss. The carrier maintained a typical take-it-or-leave-it attitude, smartly replying, ‘Well Ma’am, you don’t have a choice.” I replied, “You want to bet?” A mere 24 hours later, I secured a new policy under my terms. If you’re smart with your shopping, sometimes the insurance companies will have to take no for an answer.

 A real estate attorney can help guide you through all of the phases of home ownership. Hutchens Law Firm has locations throughout North Carolina in Cameron, Charlotte, Fayetteville, Southern Pines, Southport, and Wilmington and also in Columbia, SC.

Published by Susan R. Benoit on March 10, 2015