Homeowners insurance premium rate increases are outpacing inflation, according to new data from S&P Global Market Intelligence.
Between 2017 and 2020, premium rates rose 11.4 percent on average nationwide, according to S&P. Experts say the rates are likely to keep climbing.
“From everything I know about homeowners’ risk, I expected those numbers to be higher,” Insurance Information Institute’s Dale Porfilio told the Washington Post. “Honestly, I would say they still should go up further.”
In 2021, the average annual premium rose to $1,398.
Insurers are adjusting premiums based on recent factors, including rising material costs and supply-chain disruptions that impact home-replacement costs. Location also factors into increasing premiums based on the threats from natural disasters and the costs to rebuild a house based on local ordinances.
Insured damage from tornados, hurricanes, wildfires, and other natural disasters reached $82 billion in 2021, according to the Insurance Information Institute (Triple-I).
What You Can Do to Lower Your Homeowners Cost
To lower your homeowners insurance premium, one way is to shop around with different carriers. It’s a time commitment to do so on your own, or you can work with an independent insurance broker who can do the work for you.
But remember, don’t consider price alone. The insurers’ financial stability matters, and try to assess the insurer’s service quality.
Another possibility is to raise your deductible, the money you pay towards a claim before the insurance company starts paying. For example, if you can raise your deductible to $1,000, you may save as much as 25 percent, according to Triple-I.
Another easy way to save is the bundle. Often advertised by major insurers, many companies will reduce your premium by 5 to 15 percent when you buy two or more policies from them.
Check out Triple-I’s blog on 12 Ways to Lower Your Homeowners Insurance Costs for additional ways to save.
