What Affects the Pricing of Home Owners Insurance in New Orleans?

Let’s face it..home insurance in New Orleans is expensive.  If you own a home in this region there’s just no way of escaping the high cost to protect your home.  In fact, after Florida, Louisiana has the highest premiums for home insurance, and, within the state, New Orleans is the 3rd most expensive city.  See for yourself here:  https://www.valuepenguin.com/best-cheap-homeowners-insurance-louisiana

Most questions we get from clients and potential clients revolve around price.

We hear Questions like:

“Why is my home insurance so high?”

“Is there anything I can do to save money on my home insurance?”

“Why did my home insurance go up?”

When we discuss insurance (which is every second of every work day) price, almost inevitably, comes up.  We get it.  Home insurance in the greater New Orleans area is expensive.  Regardless of where you live:  Algiers, Mid-City, Uptown, or Metairie, it’s expensive.  

By the lake or by the river, it’s pricy.

Making a decision solely on price is NOT the best idea

You never want to sacrifice coverage for price unless you have no choice.  Cheap insurance that doesn’t pay is pointless, and a waste of money.  It may satisfy the mortgage company’s requirement to have coverage, but in the end if it doesn’t give you proper coverage, what good is it?

Your goal should be in getting value.  Value is the intersection of a reasonable price with acceptable coverage, and that point is different for different people.

 

Is there something I can do to  keep my home insurance price down?

There are some factors that drive the cost of insurance that are out of your hands, unless of course, you would consider moving farther north where insurance is cheaper.  For most of us that is not a realistic option.  So we wanted to share with you some things that you do have a little control over.   

 

*Improve your Credit Score

Your credit score plays a HUGE role in your home insurance premium.  With some companies you can save a noticeable percentage. If your credit score is average or below average, focus on increasing your score by reducing your debt, making payments on time, don’t take out new credit, keep your oldest credit card open (it establishes the age of your credit history).  This will not have an immediate impact on your premiums, but at renewal you may qualify to have your insurance re-quoted with more companies, giving you other options.  And more options are good.  Learn more about how to improve your credit score here: (https://www.credit.com/credit-repair/how-to-improve-credit-score/)

*Install a monitored Alarm

Most companies will give you a discount for having a monitored alarm for both burglary and fire.  The key is MONITORED.  There is an upfront cost for the alarm installation and monitoring service, but the peace of of mind is worth it and, if you’re lucky, the savings on your insurance will cover the cost of the service.

*Update your Home- Electrical, Plumbing, AC, Roof

The age of, not only the house, but some of the main systems, impact the cost of your insurance.  If you’ve updated all your electrical (panel and wiring), plumbing (including water heater), HVAC (air conditioner and heater) and/or your roof, you most likely will qualify for some significant discounts.  Many post-Katrina houses that were completely gutted and redone are treated like new homes for pricing purposes because all the systems have been updated.  Be warned though, as these systems age, you will slowly lose your discounts.

*Bundle your insurance with the same company

Some insurance companies give you a price break if you have more than one policy with the same agency (Multi-Policy Discount).  So, if your home and flood policies are with two different agencies, you could be missing out on savings.  This can apply to your auto insurance as well.  If your home and flood are with one agency and your auto is somewhere else, you can be missing out on savings on your auto.

* Increase your Deductibles

Your deductible represents the amount of a claim you are responsible for before your insurance kicks in.  For example, if you have a $1,000 deductible, the amount of damage would have to be more than $1,000 before you can get insurance money.  The higher your deductible, the more you save on your premium because you are responsible for a higher amount out-of-pocket before insurance comes into play.  You can learn more about deductibles here: http://gisnola.com/the-importance-of-understanding-your-deductible/

*Buy a newer home

This may not be a feasible option for everyone, but if you’re in the market, know, as a general rule, the newer your home the less expensive the insurance.  Newer plumbing and electrical systems are less likely to fail.  A brand new roof, presumably, will stand up better to hail and your HVAC system is more efficient at removing moisture from the air. The “Year Built” of your house is one of the first factors considered in pricing your insurance.

*Buy a house with a “Hip Roof”

 

Studies show that houses with a” Hip” roof shape are more hurricane resistant and perform better in extreme winds compared to a “Gable” roof.  Read more here about how roof shape affects your home insurance here: (http://gisnola.com/roof-shape-home-insurance-discounts/)

*Location, Location, Location

The location of your house does make a difference.  There was a time where, if you were within two miles from the lake, very few companies would consider writing your insurance.  Still, if you are outside the levy system or near a coastal waterway, your options may be limited.  Some companies are more competitive than others in certain New Orleans neighborhoods.  This is not so much an issue in the city, but as you get further away from the city, your proximity to fire hydrants and fire stations impacts your price.

 

All I want is to do is pay less for my insurance

Whatever you do, DO NOT buy insurance just because it’s cheap.  You get what you pay for.

 

Work with an Independent Agent

Independent agents represent multiple carriers and will have options for you to consider; they are not limited to one company.  Remember, the more options you have, the better.

 

Review your insurance annually

Every year, when your renewal comes out, that’s a great time to take a look at the details of your policy: to make sure your coverages are sufficient, that you are receiving any discounts that you qualify for and that your information is current.  Keep in mind that if you’ve been with a company over 3 years they can’t just cancel you for no reason, so changing companies over a small amount of premium might not make sense.  

 

Will premiums ever go down?

All hope is not lost.  We have seen a bit of reprieve in the last year regarding premiums.  More companies selling insurance are not only slowing down on premium increases but we are also, in some cases, seeing some premiums drop.  While we will never see rates like they have in Oregon or Utah, the longer we go without a major hurricane or other wind event, the better chance rates will not go up across the board.