Just when we all thought our home values have hit rock bottom, we get chopped again at the knees.  Many homeowners are seeing an increase in their homeowner’s insurance rates.  This is not confined to the areas of our country that have suffered catastrophic losses due to hurricanes.  It is happening all over the country.

We all pay the price for bad weather.  Even if we are not in the hurricane path or live near Tornado Alley, insurance premiums have increased across the nation because of bad weather.  

While insurance companies used to base their premiums on these bad weather factors happening once in a decade or two, even averaging the occurrences over 30 to 100 years, they have changed their model now to include a much shorter period of time which has seen its share of hurricanes.

Advocates aren’t buying the new model.  Many say the model should spread risk out over very long periods of time, keeping premiums steady through calm and turbulent periods.  Changing to such a short-term history as a basis for rates is unfair.

The premium increase will most likely stay in force, yet we very well could see the calming trend (we are all praying for) over the next few decades.  Our rates will stay at this high level with no adjustment once this stretch of bad weather comes to an end.

Technorati Tags: home investments, home prices, homeowner insurance