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Rock Street, San Francisco
Rock Street, San Francisco
Homeowners Insurance

Have you ever wondered why your home insurance premium goes up every year? Experts from know that it can be quite costly to pay for something that goes up annually. After all, if your home insurance cost increases every year, then so does your mortgage payments.

So why does it go up regularly, anyway? Is it an elaborate scheme that allows insurance companies to grab more money? Or are there relevant factors that do affect a home insurance premium’s annual increase?

Reasons Why Homeowners Insurance Increase Annually 

Now, there are legitimate reasons as to why your home insurance has to increase every year. The good news here is that if you know the reasons behind the annual hike, then you can control the amount that increases annually, thus allowing you to save up on insurance costs. Here are the main reasons:

  • Inflation

The first reason is inflation. Unfortunately, there’s nothing you can do about this factor since it is an economic factor. If inflation goes up, then the price of everything may go up– including your insurance premiums. Usually, insurance companies use the Consumer Price Index as their basis for adjusting prices when inflation sets in. If the CPI is hawkish, then insurance companies raise premium costs.

  • Credit History

The logic behind using credit history as a means to determine insurance premium cost is whether or not you’re a good payer of the insurance payer or not. If you have a good credit rating, then there’s a higher chance that you’ll pay your insurance on the dot. The higher the risk of you not paying your insurance premiums, the higher the cost will be.

  • Home Accessories

The more accessories you add to your home, the higher your premium becomes. For instance, if you install things such as swimming pools or playgrounds, your premiums will get higher since there will be higher risks of injury.

Are There Ways to Ensure That Your Yearly Premiums Are Kept Low?

By knowing these factors above, there are a few ways you can make your insurance premiums stay at its price range. First, make sure you don’t add home accessories and always pay your premiums on time.

Other than that, you may also want to lessen your coverage should you think your insurance costs are too high. Lastly, you may ask your insurance company if there are any discounts given to loyal customers. If there are, see how you can avail those discounts so you can save up in the long run.


So to answer the question we posed above, no, there is no elaborate scheme made by insurance companies to exploit money out of you every year. The reason why your insurance premium goes up every year is that certain risks are added to your home every year as well. That said, it’s essential to know the factors that affect insurance cost increase so you’ll know how to ensure that it won’t go up too much or maybe become lower.

Post Author: Lucas Abbott

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