GRAND RAPIDS, Mich. — If you have renter's or homeowner's insurance, you may soon notice that you'll be paying significantly more in the upcoming year. Experts say there are several reasons for the spike.
13 On Your Side learned of this story after speaking to someone who said that when he went to check his renter's insurance renewal, he was told that he'd be paying an $800 yearly premium, instead of the $400 yearly premium he had been paying.
He said he hadn't made any claims, but his rates doubled while still getting the exact same coverage. And experts say, this increase isn't necessarily specific to just one company.
"I have seen a recent study that showed that nationwide, there's about a 12% average increase over the year of 2022, and we're expecting that to keep adding on," said Anita Fox, Director of the Michigan Department of Insurance and Financial Services (DIFS).
According to the Michigan DIFS, across the country, and here in Michigan, homeowners and renters insurance policy rates have been impacted by inflation, labor shortages, and increased building material costs.
"And all of those go into how insurers set rates," Fox said.
They add that because insurance rates are very individualized, they can therefore vary from company to company. That's why experts are encouraging Michiganders to shop around and ask their agent about how they could possibly lower the cost of their insurance.
"Once you've done that, you can start to get quotes from a variety of different insurance companies," said Erin McDonough, Executive Director for the Insurance Alliance of Michigan. "And that will help you match your budget to your coverage and make sure that you're properly covered in the event of a disaster."
Experts add that there are a lot of things that go into choosing levels of coverage, limits, and deductibles.
"It's kind of a trade off that families have to make," said Anita Fox, "to make the best decision based on their needs and their budget."
When considering changes to their policy to save money, experts say Michiganders should make sure that they have a plan, such as a dedicated emergency fund, to pay the policy deductible to help them avoid severe financial strain should unforeseen circumstances damage their home or possessions.
"Inflation continues to drive up the cost of many goods and services across the country, and this includes the insurance that you may be looking for for your home or for your renter's insurance," said Erin McDonough. "All
those costs have increased dramatically. it's something that we've all seen in every aspect of our daily lives."
For questions or concerns about insurance, you can call the department of insurance and financial services Monday through Friday from 8 a.m. to 5 p.m. at 877-999-6442, or visit their website.
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