Home Insurance Prices are Increasing Faster Than the Inflation Rate

As inflation rises, so are home insurance premiums at double the rate. 

In recent news, home insurance rates in places such as Arkansas have increased by 18.1%, and Washington and Colorado by 17.5%. Oklahoma has the most significant premium increase at a $257 average premium. From May 2021 to May 2022, the price of goods and services has increased by 8.6%. In correlation, home insurance has also increased its costs, with over 13 states seeing average premium increases over 50% higher than the inflation rate.
Within this last year alone, 90% of homeowners witnessed their yearly premium increase by an average of $134, which averages to 12.1% when compared to a year ago. These findings come from a study by Policygenius, which was limited to 25 states that had a significant number of policies according to recent statistics, totaling 8,698 active home insurance policies due for yearly renewal during this time period (May 2021 to May 2022).

According to licensed P/C insurance expert Pat Howard from Policygenius, “Home insurance coverage and premium amounts are based on the cost to rebuild, which takes into account the price of lumber, roofing, contractors, and anything else that goes into building a home. As home construction costs continue to outpace the overall rate of inflation due to supply-chain disruptions, unprecedented labor shortages, and frequent natural disasters, home insurance prices have followed suit.”

In order to save money on your homeowner’s insurance consider the following:

• Review your current limit, it is not the same as your home’s market value
• Bundle your policies 
• Improve security by installing central fire and burglar alarms, sprinkler systems, or adding deadbolt locks
• Consider home updates such as adding storm shutters or updating the roof, heating, plumbing, and electric system
• Maintain a good credit record
• In states like Florida, obtain a Wind Mitigation Report and/or a 4-Point Inspection
• Make sure that your insurance company is applying all the available discounts such as non-smoker, loss-free insured, whenever available
• Consult and discuss your current program with an experienced licensed agent

To learn more about your home insurance options and how to keep your premium at the best price, contact our insurance specialists.  

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*Source: https://www.insurancejournal.com/news/national/2022/07/12/675555.htm