I recently saw a spirited debate on Reddit about home owners insurance on the rise in Montana.  This is on the heels of massive property tax increases due to new home valuations across the state.  I know I have some friends here in Great Falls that are just floored by how much the state says their home is now worth.

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Do Property Tax Valuations Drive Up Insurance Prices?

No.  According to Watkins Insurance Group:

A higher tax appraisal does not have a direct impact on your home insurance premiums. Just because your tax bill goes up, does not mean your home insurance bill will go up. Your home insurance premium is determined by many things, but your home’s market value or tax-appraised value is not one of them. Instead, your home insurance premiums may go up if the rebuild cost for your home increases, and therefore your coverage amount is increased. It could also go up if the insurance company increases rates for all clients in your area due to poor underwriting results, if there have been natural disasters in your area which have caused increased claims, or if the rating factors about your home have changed.

What Causes Homeowner's Insurance To Rise?

From Traveler's Insurance, these are the main reasons:

  • Extreme weather events and catastrophes
  • Rising material costs mean it would cost more to rebuild your home
  • Skilled labor shortage

From Value Penguin, insurance rates in Montana have risen 6.9%, the 9th highest rise in rates in America.


What Can I Do To Keep My Premiums Low?

According to iii, there are a few ways to lower your premium.

  • Shop around.  It's a pain, but it works
  • Raise your deductible.  Just make sure you can afford the new deductible, and weigh it against how disaster prone your area is
  • Get your home and auto policies from the same insurer
  • Give your home more protection from disaster, and consider updating heating, plumbing and electrical
  • Better home security
  • Keep a good credit score
  • Loyalty pays. Stay with the same company instead of constantly changing
  • Every year, re-evaluate your things and compare them to your current policy and make necessary changes
  • Factor in home insurance when you're in the market for a home

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