Homeowners’ insurance premiums are rising in the East Valley and across the nation, but a new guide released by the Arizona Department of Insurance can help consumers get the most for their money.
The 2003 edition of the Homeowners’ Premium Comparison Survey is a free guide, available in English and Spanish, that ranks 63 insurance companies based on premium prices at three coverage levels on masonry and frame-built homes in different parts of Arizona.
Insurance costs are increasing for a variety of reasons including rising property values, higher replacement materials costs, high-crime statistics in Arizona, fires and an increase in the number and size of claims filed by policyholders, said Joe Gacioch, Allstate corporate relations manager for the Southwest region.
Allstate increased its homeowners’ premiums 7.4 percent to 144,000 policyholders throughout Arizona in March 2002, but no additional rate increases are planned.
Rising property values is the number one reason costs are rising, Gacioch said.
"You keep hearing about the hot real estate market we have," he said. "Home values are going up, and it costs more to insure them."
The cost to rebuild them is also increasing, he said.
Some insurers are paying out more than they’re taking in because the size of claims is increasing, which ultimately raises premiums, said Jim Kriznauski, spokesman for State Farm.
State Farm and other insurers relied on bond investments to offset higher costs when the market was good, but the down economy has prevented that trend from continuing.
State Farm’s last rate increase was 23 percent in July.
Last year, the number of written complaints filed by Arizona homeowners doubled to 422, said Erin Klug, spokes- woman for the Arizona Department of Insurance. Some of the complaints involved rising premium costs, she said.
Consumers also complained of trouble finding coverage for homes that were either vacant, older, low-valued, high-priced or ones with claims within the last three years.
Insurance companies are increasing premiums, canceling policies and being more selective about who they insure, Klug said.
"Some of the folks may have a harder time getting insurance or they may pay more," she said.
"They may be harder to come by now, but there are still discounts available."
Some insurers offer discounts for good credit, multiple policies with the company and home security and safety precautions.
Price quotes in the 2003 insurance survey were based on hypothetical situations in Mesa, Phoenix, Peoria, Flagstaff and Tucson.
Each example is based on $100,000 of dwelling coverage with a $250 flat deductible.
All premiums are based on two-story, single-family homes built in October 2001 with one fire extinguisher, two smoke detectors and single-cylinder dead-bolt locks.
Premium prices range from $179 to $1,265 for a masonry home in Mesa.
The hypothetical address was at McDowell and Power roads.
The premium price rose $2.24 from 2002's survey for the least expensive premium, but is unchanged from the most expensive premium.
For a frame-built home at the same address, premium prices range from $188 to $1,265.
The lowest price for premiums on this type of home increased nearly $10 from last year, but the most expensive premium was unchanged.
Consumers can learn more about selecting insurance policies and providers from the Arizona Department of Insurance.
The department offers free guides on the types of coverage available, the importance of insurance, how to file complaints and which companies have complaints filed against them.
The complaint ratio combines auto and homeowner insurance complaints.
For more information, call the Arizona Department of Insurance at (602) 912-8456 or go to www.id.state.us.az