The renewal notice arrived on a week when I was already counting dollars. Our 40-gallon water heater quit on Wednesday morning, the new one went in Thursday for $1,650, and on Friday the homeowners renewal showed up in the mailbox. New annual premium: $1,812. Last year: $1,486.
That's $326 more, or 22 percent, for the same house, the same coverage and no claims. Our last claim was a small wind claim for some siding in 2010. Fifteen years of being boring customers and this is the thanks.
I'll admit my first reaction was not my most gracious. I said some things to the kitchen counter. Greg read the notice, said "Huh," and went to look at the new water heater again, as if it might explain itself.
Why this is happening in Ohio
Once I calmed down, I did some reading. I'm not an expert, but the picture is fairly clear, and it isn't just us. Homeowners premiums have climbed all over the country, and the Midwest has taken a beating.
A few reasons kept coming up. Hail and wind storms have been costly here, and Ohio gets its share of spring hail. The cost to rebuild has gone up sharply since 2020, because lumber, shingles and labor all cost more. Insurers buy their own insurance, called reinsurance, and that has gotten more expensive too. When an insurer's whole book of Ohio homes costs more to cover, everyone's renewal goes up, claims or no claims.
When I looked closely at the declarations page, I found one more reason sitting right there. Our dwelling coverage went from $248,000 to $271,000. Most policies have an inflation guard that raises the coverage amount each year to keep up with building costs. That's a good thing in theory, because you want enough to rebuild. But more coverage means more premium.
What I asked our agent
I called our agent on Monday with a page of questions. She was patient, which I appreciated, because I was not my most cheerful self. Here's what I asked and roughly what I learned.
Is $271,000 the right number to rebuild? She ran the replacement cost estimate again with our real details: 1977 split-level, about 1,720 square feet, attached two-car garage, a few updates. It came out close. So the coverage isn't padded, it just reflects what building costs now.
What would a higher deductible save? We have a $500 deductible. Going to $1,000 would save about $140 a year. Going to $2,500 would save about $310. We have emergency savings, so a higher deductible is something we could live with.
Is our roof age a factor? Yes. Our roof went on in 2004, so it's 21 years old. She said many insurers in Ohio are now looking hard at roofs past 15 or 20 years. Some are switching older roofs to actual cash value, which means they pay what the roof is worth after depreciation, not what a new one costs. Ours is still covered at replacement cost for now. I wrote that down twice.
Is there a separate wind and hail deductible? Not on our policy. Some policies now have one set as a percentage of the dwelling coverage, like 1% or 2%. On $271,000, a 2% deductible would be $5,420 for a hail claim. That's worth knowing before you compare quotes.
What discounts are we missing? We already bundle with our auto. She mentioned a discount for a monitored smoke alarm and one for paying in full, which we already do.
What we're doing about it
For now, we paid the renewal. I didn't want to rush into a switch in the same week as a water heater, and I didn't want a lapse while I shopped. You can usually change insurers mid-term and get a prorated refund for the unused months, so paying now doesn't trap us.
Here's the plan:
- In September, have an independent agent quote our home and both vehicles together, so we can see more than one company's price.
- Compare quotes line by line: dwelling amount, deductible, roof settlement terms, any wind or hail deductible, and liability limits.
- Seriously consider moving to a $1,000 deductible.
- Start a roof fund, because a 21-year-old roof is going to need attention soon whether or not insurance helps.
If your renewal jumped too, my one piece of advice is to read the declarations page side by side with last year's before you call. The reason for part of the increase may be printed right there. And ask the roof question. I didn't know it mattered until this week.
