Does Homeowners Insurance Increase From Year to Year?

Your mortgage lender requires insurance coverage on the property.

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Rising insurance premiums are a common complaint among homeowners. Homeowners using escrow notice the hit each month as the increased premium raises the mortgage payment. Your agent re-evaluates your policy every year, often resulting in a premium increase. Whether or not your insurance increases each year depends on changes to your house, your credit rating, inflation and claims history.

Property Changes

According to the National Association of Insurance Commissioners, you may notice an increase in your yearly premium if your property undergoes any changes the prior year. Adding a swimming pool, trampoline or pet to the property increases the likelihood of an injury occurring, which in turn could increase your yearly premium. On the flip side, if you install a property alarm, fire sprinkler system or smoke detectors, you may be entitled to a discount on your premium.

Credit Score

All insurance policies pull your credit score for evaluation. Statistically, homeowners with good credit have fewer claims than those with poor credit. As such, insurance companies charge higher premiums to those with poor credit scores. If your score lowers from the previous year, you may notice an increase in your insurance premium for the next year.


Insurance companies charge less for customers who do not file claims against the policy. According to Bankrate, you may not notice an increase in your yearly premium for just one claim. Multiple claims, such as two within a three-year period, might send your rates skyrocketing. Claims that are more likely to boost your premiums include dog bites, water damage and slip-and-fall claims.


High inflation often forces insurance companies to increase premiums. As costs increase, the insurance industry must increase your insurance premium to match. The insurance industry uses the Consumer Price Index to measure inflation. When the CPI goes up, expect your premiums to follow in turn.