Factors Affecting Homeowners Rate Increases
For most people, purchasing a home is one of the most significant investments they will ever make. However, while this milestone can be exciting and rewarding, it may also include plenty of risk. Furthermore, while most homeowners understand the importance of financially protecting themselves and their property with adequate insurance, appropriate coverage for your home may also involve impactful expenses.
Understanding the Current Homeowners Insurance Market
Times are becoming more difficult for many people across the United States to maintain adequate insurance amid hard market conditions. The current homeowners insurance market has seen many people dealing with increased prices for coverage despite not having submitted a claim or made any changes to their policies. This trend is expected to continue in 2024.
Why Homeowners Insurance Rates Are Rising
The homeowners insurance market can be affected by many factors across the country and around the globe. In recent years, many events and circumstances have led to the current hard market, including the following:
- Economic conditions—As a part of the U.S. economy, the homeowners insurance market is impacted by its ebbs and flows. Although inflation may have peaked in June 2022, those times continue to ripple through the current economy, including the insurance market.
- Repair and rebuild costs—Many building materials, such as lumber, concrete and steel, continue to be priced at a premium as global supply chains reestablish themselves following the COVID-19 pandemic. Furthermore, labor shortages in the construction industry have increased the cost of repairing or rebuilding homes, leading to more expensive claims.
- Disaster-related perils—Natural disasters and severe weather events, such as wildfires, hurricanes, severe windstorms, hailstorms and floods, can wreak havoc on homes, leading to numerous expensive claims against homeowners insurance policies. As these events continue to devastate U.S. homeowners, insurance companies must raise rates to recoup their costs.
- Reduced capacity—In response to the aforementioned natural disasters and other market factors, many homeowners insurance companies have decided to exit high-risk areas or adjust their underwriting requirements. Homeowners in many areas struggle to find coverage or are paying higher prices.
Get the Right Coverage
Established in 2005, McCartan Insurance Group has nearly two decades of experience serving the coverage needs of homeowners, families, individuals and businesses. Our agents understand the many factors impacting the homeowners insurance market and will work to help you maintain optimal coverage at fair rates. Visit our website or call 515-633-2273 to get started today.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.