Homeowners Insurance Went Up? Here Are 4 Reasons Why

Rising homeowners insurance premiums can be a burden -- but it's a cost you might get stuck with.

The great thing about locking in a fixed-rate home loan is getting to make the same monthly mortgage payment until you own your home outright. But that doesn't mean homeowners get to enjoy fixed monthly costs on a whole.

In fact, one expense that could easily go up from year to year is your homeowners insurance policy. If your rates recently rose, these could be the reasons behind it.

1. You filed a bunch of claims against your policy

The purpose of having homeowners insurance is to be able to submit a claim when damage to your property occurs so you're not stuck with exorbitant bills. But the more money you ask your homeowners insurance company to pay out, the more likely it will be to raise your premium rates once your policy is due for renewal.

Does this mean you shouldn't file a claim against your homeowners insurance policy the next time serious damage occurs? Not at all. If your home sustains $10,000 in damage and your insurance company will pay for all of it minus your $750 deductible, then you should absolutely move forward with a claim. Just don't be shocked if your premiums rise after the fact.

2. Other policyholders filed a lot of claims

Even if you didn't file a number of claims with your insurance company (or any claims, for that matter), if other local policyholders recently filed a lot of claims, your costs could go up along with theirs. This sort of thing can happen in the wake of a major storm or weather event. If an insurance company sees a large uptick in claims from the same coverage area, it could raise rates for all insured homes within that area.

3. Construction costs are rising

When determining what premium rate you're eligible for, your insurance company will take your home's replacement cost into account. But now, with construction costs being higher, it might take more money to rebuild your home in the event of extreme damage. And so you might see your premiums rate rise to account for that.

4. You added a feature that lends to higher replacement costs or liability

Certain home features can make your property safer and potentially result in lower insurance costs. But if you put in a pool or hot tub, for example, you'll almost always see your homeowners insurance costs rise. That's because adding these features increases the chances of there being an injury on your property. As a result, you'll need to pay more for an increase in liability coverage, which protects you in case someone gets hurt while visiting your home.

Plus, it costs money to replace a damaged pool. If you put one in, you could see your premiums rise due to having higher replacement costs.

What to do if your costs keep rising

If your homeowners insurance premiums are becoming unaffordable, don't hesitate to shop around with different insurance companies and see if there's a better offer. There's no rule stating you need to stick with the same insurance company forever, so explore your options if your premiums keep rising from year to year and it's not due to actions on your part, like putting in a pool or filing a lot of claims.