My wife and I own a rental property in Anchorage, AK. My current insurance company recently sent out its renewal policy for the property, the premium is increasing from $1059/year to $1237/year. Their justification is that they have paid out $1.02 in claims for ever $1.00 of premiums in Alaska, so the raised premiums by 17% to compensate. I discovered that the deductible was only $500, so I raised it to $1,000 for the new policy which lowered the new premium to $1138/year. I am considering raising the deductible to $2000. This premium seems high. Am I justified in this suspicion or is $1138/year a fair price?
The house is a ~1200 sf "zero lot line" (it's connected to another home), two story, two bedroom home, 1.5 bath home with a wood burning fireplace. It has hot-water heat with a heated 2 car garage. Standard finishes throughout, nothing "custom." The insurance company estimates replacement cost at $203k and the policy insures personal liability at $300k. It does not include earthquake or flood insurance. The replacement cost may seem high, but I don't know that it is. Housing in Alaska is expensive compared to many other places.
Thoughts?
