Various factors can impact your home insurance premium. Here are some areas where we commonly see changes:

Reconstruction Cost

Building material costs have soared across the U.S. At Knight Magee Insurance and agencies all over the U.S., [RP1] insureds are seeing the reconstruction cost of their home increase at renewal. This is the cost to rebuild your home following a total loss. 

Often, reconstruction cost is confused with a home’s market value or even tax assessment. Keep in mind, the market value of your home includes your home and land and is impacted by real estate appraisals and recent comparable sales. 

Reconstruction cost is the estimated cost to rebuild your home only. It does not include the land, your personal property, or other structures on the premises. 

A Bloomberg articles from June 2021 stated, “building a home in the U.S. has never been more expensive.”

While no one wants to experience an increase in home insurance premiums, it’s important that should you ever experience a total loss, you are adequately covered. 

Across the industry, about 60% of homes are underinsured by 20% on average. If you partner with an agent at Knight Magee Insurance, we will go through a detailed cost estimator with you to ensure your home is properly covered.  

Loss Ratio

A loss ratio is the mathematical calculation that takes total claims and the cost to administer [RP2] those claims, divided by total premiums earned. If a company pays $80 in clams for every $160 in collected premiums, the loss ratio would be 50%. 

This number fluctuates a great deal from year to year and is impacted by non-weather-related claims (i.e., house fire, water back up) and weather-related claims (i.e., hurricanes, tornadoes, wind damage). 

Although you may not have experienced a claim on your home, your rates will be impacted by the insurance company’s financial success, i.e., premium dollars in vs. claim dollars out. 

In recent years we have seen natural disasters occur more frequently and they have become more costlier than ever! 

At the end of the day, higher rates should never equal reduced coverage. We always encourage our clients to talk with us if they have questions or concerns. We are here to review your policy and can even shop with over 20 different insurers. 

While we too are very price conscious, we are just as focused on ensuring our clients are adequately covered. 

Contact us via email or phone to learn more about the Knight Magee difference and choose us as your trusted advisor! www.kmicoverage.com


 [RP1]This makes it sound like it’s just here that we’re seeing it. It’s nationwide, yeah?

 [RP2]This isn’t the right word. Makes it sound like the company is making the claim. Alleviate? Indennify?

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