Managing Increased Home Insurance Costs
Managing Increased Home Insurance Costs
Homeowners across the United States are grappling with escalating insurance premiums that are having a significant impact on housing affordability and influencing real estate transactions. This article examines the factors driving these increases and offers strategies for homeowners to mitigate rising insurance costs.
Escalating insurance premiums
In recent years, the cost of homeowners insurance has skyrocketed across the country. According to the National Association of Insurance Commissioners and Policygenius, the average annual premium will increase from $1,272 in 2019 to $1,905 in 2023 – a 50% increase. Several factors are contributing to this trend, including the increased frequency of natural disasters, inflation in construction costs, and insurers reassessing risk in different regions.
Natural catastrophes and rising losses
Natural catastrophes have become more frequent and severe, resulting in significant insured losses. For example, insured losses from natural catastrophes are projected to reach nearly $125 billion in 2022, exceeding the 10-year average of $81 billion. This surge in losses has prompted insurers to raise premiums to offset their increased liabilities.
Inflation and reassessed risks
Inflation in building materials and labor has also played a role. The cost of rebuilding or repairing homes has escalated, forcing insurers to adjust premiums accordingly. In addition, insurers are reassessing the risks associated with certain areas, particularly those prone to natural disasters, resulting in higher premiums or, in some cases, the withdrawal of coverage options.
Impact on homeowners
The impact on homeowners is multifaceted. Increased insurance costs increase the overall cost of homeownership, potentially pricing out prospective buyers and putting financial strain on existing homeowners. In high-risk states like Florida, some residents have seen rate increases as high as 400%, and an increasing number are receiving cancellation notices from insurers. These rising costs can also affect real estate transactions, as buyers may reconsider purchasing in areas with exorbitant insurance rates, and sellers may find it difficult to attract buyers.
Strategies to mitigate rising costs
Homeowners have several options to address the burden of rising insurance premiums. Increasing deductibles is one of the easiest ways to reduce premium costs. For example, increasing a deductible from $500 to $1,000 can reduce premiums by about 25%. Installing home safety measures, such as security systems, smoke detectors and fire alarms, can make a property less risky to insure and may qualify homeowners for discounts. Bundling homeowners insurance with auto insurance from the same provider can also result in savings of up to 30%. Maintaining good credit is another key strategy, as insurers often use credit-based insurance scores to determine premiums. Finally, homeowners should regularly compare quotes from different providers to ensure they are getting the best possible rate.
In summary, rising homeowners insurance premiums pose a significant challenge to affordability and the real estate market. By understanding the factors driving these increases and taking proactive measures, homeowners can better manage their insurance costs and make informed decisions about their properties.
Ralph Schiavone
HLS Group, Inc.
1611 Pomona Road, suite 207 Corona, CA 92878
Email: rschiavone@hlsgroupinc.com
Phone: (714) 315-0027
HLS Group, Inc.; Ralph Schiavone-Broker and President is your full-service real estate agency; specializing in all aspects of residential real estate purchase, sale with over 30-years’ experience and extensive knowledge and understanding of real estate finance. We are Certified Probate Real Estate Specialists, short-sale experts, REO-agent certified and fully MLS compliant. HLS Group, Inc. and Ralph Schiavone offer a one-stop opportunity for prospective buyers and sellers to gain information about the purchase/sale process from identifying a property for purchase to placing a property for sale. We negotiate with confidence on
behalf of our clients and work seemlessly with finance professionals during the purchase/sale process.
The markets of Southern California are uniquely dynamic with many opportunities to both purchase or sell a home. The biggest keys to success are patience and appropriate market position. Know your market and how you fit within it. That’s where using Ralph Schiavone and the agents at HLS Group, Inc. will serve you best, by providing you the tools for informed decision-making.
Currently inventory is somewhat tight and communication is key to ensuring timely property opportunities. We at HLS Group, Inc. pride ourselves on strong and comprehensive communication: from the initial interview through close of escrow and thereafter. At HLS Group, Inc. a successful transaction is defined as facilitating the client’s property desire, in the area/neighborhood they wish to live, while using the most appropriate financing strategy, for the best outcome possible.
Customer service is key at HLS Group, Inc. Our relationship and support do not end once your purchase/sale is completed. We’ve built our reputation as a reliable resource in our community and are available for you in the future whenever you feel we can be of service. We look forward to working with you.
The markets of Southern California are uniquely dynamic with many opportunities to both purchase or sell a home. The biggest keys to success are patience and appropriate market position. Know your market and how you fit within it. That’s where using Ralph Schiavone and the agents at HLS Group, Inc. will serve you best, by providing you the tools for informed decision-making.
Currently inventory is somewhat tight and communication is key to ensuring timely property opportunities. We at HLS Group, Inc. pride ourselves on strong and comprehensive communication: from the initial interview through close of escrow and thereafter. At HLS Group, Inc. a successful transaction is defined as facilitating the client’s property desire, in the area/neighborhood they wish to live, while using the most appropriate financing strategy, for the best outcome possible.
Customer service is key at HLS Group, Inc. Our relationship and support do not end once your purchase/sale is completed. We’ve built our reputation as a reliable resource in our community and are available for you in the future whenever you feel we can be of service. We look forward to working with you.
