Will Your Homeowners Insurance Rate Go Up This Year?

The money doesn’t stop once you buy a home; For starters, since you’re a homeowner, you’ll be paying for homeowner’s insurance. Financial firm Bankrate compared the average home insurance premiums from S&P Global Market Intelligence to its previous survey of home insurance premiums in 2022. Prices are increasing, but why?

According to the report, natural disasters are the most common drivers of homeowner’s insurance. Due to climate change, natural disasters such as hurricanes, wildfires and floods are increasing across the country. The Insurance Information Institute (Triple-I) recorded 97 major loss events in 2021, resulting in $92 billion in insured losses. That’s up from 94 accidents in 2020, which resulted in $74 billion in insured losses, the report said.

Financial instability is another big factor. However, the market value of a home is often not the issue, but the cost of rebuilding a damaged home. Continued disruptions to supply chains and a lack of available construction work mean rising costs of rebuilding, the report says.

As a result, home insurance claims are on the rise across the country, and insurance companies are reevaluating their risk models, eligibility requirements, and raising their rates.

More from the report:

  • S&P Global Market Intelligence reports that as of January 2022, insurance carriers have submitted 177 requests for insurance increases in 43 states; Arizona was at the top with an increase of 34.
  • The current cost of homeowners insurance is $1,383 per year on a $250,000 home equity loan. If the rate hike does happen, homeowners could pay $62, or $1,445, for the same coverage.
  • However, the large increase in the number does not mean that a large number of policy holders will be affected.
  • 5 countries are set to see major price changes, and the number of policy holders that will be affected are:
    • California: + 15.3% price change, 8,769 policy holders affected
    • Washington: + 12% price change, 105,454 policyholders affected
    • Arizona: + 11.1% price change, unknown number of policy holders affected
    • Georgia: + 9.9% price change, 60,464 with affected orders
    • New Mexico: + 9.1% price change, 77,514 with affected orders
  • 5 countries are set to see the lowest changes, and the number of policy holders that will be affected is as follows:
    • Maine: -1.5% price change, 2,106 with affected orders
    • Delaware: -1.35% rate change, 18,247 policy holders affected
    • Michigan: + 0.04% price change, 137,046 policyholders affected
    • Kansas: + 0.2% price change, 23,062 policyholders affected
    • New York: + 1% price change, 252,694 policy holders affected
  • Major Insurance Companies and Growth for 2022
    • Farmers: + 19.613% price change, 208,378 with affected orders
    • Worldwide: + 14.877% price change, 2,764 points holders were affected
    • Liberty Mutual: + 13.76% price change, 94,592 point holders were affected
    • Chubb: + 9.127% price change, 4,113 policy holders affected
    • Travelers: + 7.338% price change, 116,196 policy holders affected
    • Forward: + 6.096% price change, 122,711 policy holders affected
    • Allstate: + 3.076% price change, 2,577,660 with affected orders
    • USAA: + 2.666% price change, 99,002 policy holders affected
    • American Family: + 0.679% price change, 35,861 with affected orders
  • Florida insurance problems causing insurance companies to end their business in the state. As a hurricane-prone state, this can be a challenge for Florida homeowners.

What to do:

While the cost of your home insurance may be high, there are ways to negotiate. Bankrate recommends:

  • Review your current policy. Knowing the facts will help you negotiate more easily with the insurance agent.
  • Ask about discounts on your premium. You may be eligible based on your home’s specifics, such as security settings, organization memberships, history, billing preferences and more.
  • Combine your other plans with the same provider. This will change things for you and can save you money and discounts.
  • Shop around to compare quotes. If you are not satisfied with the amount you pay, then the best option would be to look elsewhere, if you get a picture of the price.

Remember, just like you do, your insurance premiums are very personal, taking into account where you live, the age and shape of your home, and how much you say about your neighborhood, the report said. This means that even if the premium increases, it does not mean that you will be paying more on your return.

Final thoughts from the author of the report:

“Even though homeowner’s insurance rates are going up, your policy is still based on what you see. Because of this, it is possible that your home insurance premiums will actually go down,” wrote June Sham, an insurance writer and author of the report. This could be because your area had fewer claims than in previous years, your home is still new and weatherproofed, or you now qualify for more discounts. Periodic check-ups with your insurance agent or company representative can be the best way to keep up with the changes in your policy.

“If you find that the cost of your home owner’s insurance has increased significantly during renovations, know that there are things you can do to reduce the cost. Home insurance can be an important protection for your finances, which is why insurance experts and financial advisors recommend that you do not work,” added Sham.

To view the full report, visit https://www.bankrate.com/insurance/homeowners-insurance/2022-rate-increases/.

Devin Meenan is a RISMedia contributor. Email him your story ideas dmeenan@rismedia.com.