Rising Costs of Home Insurance
Ever feel like everything’s getting more expensive by the minute? If you own a home, particularly in disaster-prone states, you’re probably nodding vigorously. Yep, home insurance rates have been skyrocketing faster than a rocket on the Fourth of July.
Let’s talk numbers, shall we? From May 2022 to May 2023, renewing your home insurance, on average, cost you a 21% more chunk of your wallet, according to a peep into Policygenius’ September analysis. Following a hefty 12% increase the year before, don’t be shocked if 2024 rings in with yet another double-digit price hike.
Florida, oh sunny Florida, you’ve been hit the hardest. Over two years, home insurance rates there shot up by 68%. That’s nearly double the national average increase of 35%. Why, you ask? Let’s dive into that.
Why Florida’s Home Insurance Costs Are Climbing
Fancy a guess? If you pointed at hurricanes and flooding, you’d be spot on. But since 2021, it’s not just about the usual suspects. Add in some recent hurricanes stirring the pot, lawsuits raining over roof damages, and a growing fear of climate change making insurers jittery. This unholy mixture has seen some insurers waving the white flag, with at least nine property insurance firms in Florida calling it quits since January 2021, hiking the stress for homeowners needing insurance.
And it’s not just Florida getting all the attention; states prone to wildfires and tornadoes are also feeling the heat with sizeable premium upticks.
States with the Steepest Home Insurance Rate Increases
Curious which states are emptying their residents’ pockets the fastest? Here’s a look at the leaderboard from May 2021 to May 2023:
- Florida: A whopper 68% increase (from $1,127 to $1,896)
- New Mexico: A spicy 47% increase (from $855 to $1,255)
- Colorado: A rocky 46% increase (from $1,390 to $2,031)
- Idaho: A surprising 46% increase (from $552 to $804)
- Texas: An oil-rich 46% increase (from $1,471 to $2,141)
As Policygenius notes, this isn’t just random bad luck. It’s a blend of epic industry losses, nastier climate-related disasters, never-ending wildfire seasons, and soaring construction costs. By 2023, the average annual national cost of home insurance was about $1,700, up from $1,175 in 2019.
Challenges Beyond Increased Costs
Thinking it couldn’t get worse? In some regions, wildfires haven’t just bumped costs up—they’ve knocked availability down, as insurers hesitate to touch high-risk areas with a ten-foot pole.
While most insurers are tinkering with premiums and coverage to keep their heads above water, some haven’t managed to keep up and have shut down. It’s a tough world out there!
For homeowners who suspect their bank accounts are being bled dry by overpriced insurance, it could be wise to shop around. Compare rates from various providers. Opting for a higher deductible might just be the magic trick to lower those daunting premiums.
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