There are good reasons why homeowners rates are rising.

After years of relative stability, rates for homeowners insurance are increasing across the country, including in our state of Iowa. Why the dramatic change?

It comes down to basic economics: Insurance companies are paying out significantly more in homeowners claims and expenses than they’re receiving in premium.

The gap between claim payments/expenses has existed for quite some time. Throughout the 1990s, however, rates remained relatively stable because insurance companies were able to partially offset these deficits with gains from investments.

Circumstances changed beginning in 2000. Claim payments continued to rise, caused primarily by soaring home repair, medical and litigation costs, as well as a large influx of storm claims. Meanwhile, a weakening stock market decreased investment revenue for insurers and private citizens alike.

This has made additional rate adjustments necessary to maintain an appropriate balance between claim payments/expenses and revenue. Without them, insurers would continue to lose money, which would eventually compromise their ability to pay future claims.

There are a number of things insurance companies do to help keep premium costs down. It’s not just a matter of raising rates. At American Family, we continually look at ways to be more efficient, fight insurance fraud and finance research on safe building materials and theft prevention.

There are also a number of things homeowners can do to control their premium costs:

¨       Consider higher deductibles – A higher deductible can lower your premium. Remember, if you choose this route, you will pay more out-of-pocket expenses if you suffer a loss and file a claim.

¨       Ask about available discounts – A premium discount may be available if you have a qualifying fire/security system installed in your home or if you have a new home. If you insure your home and auto with American Family, you may be able eligible for discounts on both of those policies.

¨       Prevent home losses/damage – Regular maintenance will make your home safer and less likely to suffer damage. Routinely check your home for fire, water and safety hazards. Safeguard your home against theft, too.

Decisions to increase rates are made only after careful deliberation of many factors. Changing rates over time keeps insurance companies financially strong so they’ll be ready when their policyholders need them most: when they have a claim.

Make an inventory of your home just in case

How much do you stand to lose if your home is damaged or burglarized? While the memories attached to the items in your home cannot be replaced, the actual contents of your household can be protected if you have homeowners insurance.

Creating and safely storing an inventory of your personal belongings can help you determine what was exactly damaged or stolen if such an event occurs. This will simplify the claim process and help ensure your settlement amount is appropriate.

 

A simple way to complete an inventory is to record the items of each room by category, noting the quantity, serial number, make and model, approximate date purchased and the purchase price. It’s helpful to supplement the inventory with photos or a videotape of entire rooms or close-ups of individual items.

Once you have recorded all of your belongings, add up the value of the contents of each room.
Then, store the completed inventory in a fireproof container or a place away from your home, such as a safe deposit box.

If your property sustains damage, take the following steps:

¨       Report the claim to your insurance agent as soon as possible. Some insurers like American Family also have a 24-hour phone number policyholders can use to report their claims.

¨       If the claim involves a theft, report the incident to your police department.

¨       Prepare a list of the damaged or stolen articles. Include a brief description of each item, including its age, current value, make, model and serial number if you have it. Make a copy of the list for your adjuster.

¨       Protect your property immediately against further damage or theft. For example, use plywood or tarps to cover broken windows and damaged rooftops.

¨        If your home is uninhabitable, make sure your agent and adjuster know where you can be reached. If you change locations, provide them the new phone numbers.

Know what to do when a tornado looms

The horror of a tornado is that it can strike at a moment’s notice, often leaving residents little time to react. That’s why it is so very important that you and your family know what do well before any potential danger.

When tornado conditions are right

Take shelter immediately, preferably in an in-home shelter or a designated area in your basement – away from windows or objects that could be picked up and thrown by wind. It’s a good idea to stay tuned to TV or radio so you’re aware when severe weather is possible. Listen for a tornado siren. Watch for a dark sky, hail, a loud roar and/or a funnel cloud. If you hear a warning or see signs a tornado could be coming your way, don’t wait to see a funnel cloud to take shelter.

If you live in a mobile home, evacuate immediately – before the storm reaches your home. Tornadoes can overturn, throw or crush mobile homes. If you have ample time, go to the nearest community shelter, friend’s home or other safe building.

During a tornado

Don’t open windows. According to the Institute for Business and Home Safety, opening windows invites wind to enter and blow the house up like a balloon. Plus, it wastes valuable time you could use to seek shelter. A sturdy table or desk can provide you protection during the storm.

After a tornado

Don’t use matches, lighters, appliances or light switches until you’re sure there is no gas leak. If you smell gas, the National Center for Environmental Health recommends shutting off the gas supply using a valve near the meter. Also shut off electricity; sparks could ignite the gas. Turn off the water supply. Arrange furniture so chairs and beds are away from windows, mirrors and picture frames. Place heavy or large items on lower shelves.

Beware of dog bites: Tips to keep you and your children safe.

There are tremendous responsibilities and potential liabilities that come with owning a dog. The Centers for Disease Control and Prevention reports there are approximately 4.7 million dog bites per year, resulting in 800,000 injuries that require medical attention. Half of those injuries are to people under the age of 18.

Dog behavior is a serious concern for everyone. Insurance companies often pay civil judgments for dog bites that happen on their customers’ properties. Those payments affect insurance premiums that policyholders pay.

Dog bites cost the property/casualty insurance industry roughly $413 million in 2010. Since 2003, the cost of these claims has risen nearly 37 percent. When you consider those types of claims account for nearly one third of homeowner’s liability claims, it is important to do everything you can to prevent dog bites.

The Centers for Disease Control and the U.S. Humane Society offer the following tips on how to prevent dog attacks. Share this information with your loved ones for protection in a variety of situations:

For owners:

¨       Responsibility as a dog owner begins before the puppy or dog is brought home for the first time. Research dog breeds and select a dog suitable to your family and lifestyle. If you are buying a puppy, ask to meet the parents and observe the setting in which the young dog was raised.

¨       Train or socialize your dog. Don’t play aggressive games with your dog.

¨       Spay or neuter your dog.

¨       Seek professional advice if your dog starts to become aggressive, such as growling or nipping.

¨       Closely supervise children when around dogs. The size of a child may cause a dog to act in a dominant way toward a child.

For everyone:

¨       If a strange or threatening dog approaches, stand still. Don’t run or scream. Try to back against a tree or car. If you have time, climb on a car or up a tree. Then call for help. If the dog moves away, you can then move away carefully.

¨       If a dog knocks you down, lie on the ground with knees tucked to your chest and a fist over each ear. Remain very still and quiet.

¨       Don’t stare. Staring threatens dogs.

¨       Be aware that about 80 percent of dog bites occur in the victim’s home or at a friend’s home. These “friendly” dog bites account for the majority of treated dog bites.