Home insurance companies are charging more and providing less coverage after losing money in five of the past six years, according to reports.
Why it matters: Homeowners face higher deductibles, new coverage limits, and double-digit premium hikes. All that adds up to more money coming from their pockets if they need to file a claim.
Higher premiums also make it hard for some home buyers to get insurance. And in some states, such as California and Florida, some insurers are halting the sales of new policies.
What they’re saying: “We’re seeing moves to put more of the risk back onto the homeowner, tougher underwriting restrictions and big rate increases,” Lauren Menuey, a managing director at Goosehead Insurance, told the WSJ. “I don’t think anywhere is safe from this right now.”
By the numbers: According to an S&P Global Market Intelligence analysis for The Wall Street Journal, 31 states have approved double-digit rate increases since 2022.
- Arizona, Illinois, North Carolina, Oregon, Texas, and Utah saw the largest approved premium increases, ranging from 20% to 30%.
$90 billion: that’s the cost of insured damage in the U.S. from natural disasters in each of the past three years, according to insurance broker Aon.
- For comparison, inflation-adjusted damage averaged $54 billion during the 2010s and $40 billion in the 2000s, the Aon data shows.
Some Positive News: Insurance analytics firm Verisk reports that total reconstruction costs in 2023, including labor and materials, are up 1.6%. That’s significantly down compared with rises of more than 7% in the past three calendar years.
What we’re watching: The Insurance Information Institute expects that the cycle of continuing to take rates upward will continue for the next two years.
“We’re still seeing the industry having an underwriting loss this year continuing out to 2025,” Dale Porfilio, chief insurance officer at the Triple-I, told the WSJ.
Go deeper: Read more about insurers charging more for less at wsj.com.
Photo: Green vines and lush plants grow over walls of a home in Austin, Texas—one of the states with the largest approved increases in insurance rates. (Shutterstock)