Like every insurer, Farmers, like all insurers, continues to raise its rates for homeowners insurance because claims are steadily increasing.Every year, Texas homes sustain substantial damage caused by tropical storms, hurricanes, tornados, hail, frozen/broken water pipes, and numerous other causes. This results in large claims being paid by insurers, which raises everyone’s rates.
One way Farmers helps consumers combat rate increases is to recommend that policyholders carry a higher deductible. Instead of choosing a $250 or $500 deductible, they often recommend a $1,000 deductible. What its customers save per year in premiums pays for itself in just a couple of years if they have a claim.
Farmers is one of the most well-known insurers in Texas and offers home insurance with high deductibles. Though Farmer’s recently pulled out of Florida (another Gulf Coast state), it has shown no signs of ceasing to write new home insurance business in Texas. Its average premium in Texas is $1,443 per year.
Many people choose a low deductible because they like the thought of paying less out-of-pocket if they have a claim. However, by choosing a higher deductible, you’ll lower your premium enough that you can put the savings aside to pay a higher deductible if you ever have a claim.