Why Are Home Insurance Rates Going Up

Small houses sitting on stacks of coins

If your home insurance premium went up this year, you’re not alone. This industrywide trend has been fueled in large part by inflation and expensive natural disasters.

Reasons for the Increase

The recent increase in home insurance rates is the result of a perfect storm of circumstances—most of which are out of your control. Here are the main factors driving the increase:

Cost to Repair and Rebuild Homes

Inflation has resulted in the rising cost of construction labor, as well as construction materials like lumber, roofing and flooring. Therefore, it costs more to repair and rebuild homes than ever before.

While inflation overall stabilized in 2023, material costs remain 40% higher than pre-pandemic averages.

Skilled Labor and Supply Chain Shortages

The COVID-19 pandemic caused a shortage of skilled labor in the construction industry, making it very difficult to get a contractor out to your home. The pandemic also caused extreme supply chain challenges. Both of these issues continue to drive up repair costs today.

More Severe Weather Events

Catastrophic weather events such as hurricanes, droughts, wildfires and flooding have led to record-setting claim payouts and sky-high financial losses. As the frequency and severity of these events increase across the country, so does the cost of insurance. In fact, your premium can be affected even if you haven’t been personally affected by severe weather.

Ways to Lower Your Premium

While you may not be able to control inflation or the weather, there are things you can do to lower your home insurance premium—or at least keep it in check.

Bundle Your Policies

If you haven’t done so already, you should consider bundling your policies with the same insurance carrier. You can get a discount for bundling your homeowners, condo or renters policy with an auto or motorcycle policy. Bundling also works with an umbrella policy.

Take Advantage of Other Discounts

All insurance carriers offer a variety of discounts to help you lower your home insurance policy premium, whether you live in a house, condo or apartment. For example, you can save if you choose paperless billing or if your home is equipped with internet-connected devices that alert you in case of theft, fire or water damage.

Tailor Your Insurance Coverage

It makes sense to only pay for the insurance you need. That’s why you should review your current home insurance policy each year. Remove any coverages that don’t apply to your particular situation and make sure your limits reflect what your property costs to replace.

Update Your Home’s Systems

Installing new systems in your home—or updating existing ones—can lower your premium. This includes your home’s electrical system, heating system, plumbing system and roof.

Increase Your Deductible

Did you know that choosing a higher deductible can lower your premium? Smart homeowners have figured out this makes sense, as the chance you’ll ever file a claim is small. Not surprisingly, more and more people are raising their deductible every year.

Decrease the Likelihood of Experiencing a Loss

Not only will protective devices save you money through home insurance discounts, they’ll also lower your risk of ever needing to file an expensive claim.

Lower Your Risk With These Devices
  • Smoke detectors
  • Smart home protection systems
  • Water sensors
  • Fire alarms
  • Interior sprinkler systems

*Instant quote not available for all applicants. Restrictions apply.

The above content is for general informational purposes only and does not replace or modify any provisions, limitations or exclusions contained in any insurance policy.

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What We Do:

  • To help calculate price and make eligibility decisions, we obtain different types of public records and geographic data from third parties. Such data includes, but is not limited to, information regarding year built, square footage, building material, number of stories, age of roof, and assessed value. You may review this data to correct any inaccuracies.
  • We may also order and review your insurance claims history, a credit-based insurance score, and/or a credit report.

What We Don’t Do:

  • We will not impact your credit rating in any way by accessing your credit-based insurance score.
  • Resell or distribute your credit-based insurance score.

*Instant quote not available for all applicants. Restrictions apply.

The above content is for general informational purposes only and does not replace or modify any provisions, limitations or exclusions contained in any insurance policy.

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