We want to share some insights on the state of the insurance industry and the factors driving the adjustments you might see in your premiums this year. Unfortunately, premium increases many consumers are seeing this year are an industry-wide issue. A perfect storm of market trends has driven up the cost of building homes, and with it the cost of insuring them for repair and replacement.

While your coverage is already tailored to your specific needs, here are a few big-picture trends and statistics to remember as you get ready for renewal or to change insurance coverage.

  • In 2023, the average cost to insure a home in the U.S. was $142 per month, or $1,700 per year. As you know, prices will vary by home value, ZIP code, county, and state.
  • Since 2015, the average homeowner has seen their homeowner’s coverage jump by 21%. The increases in weather-worn states are even higher.
  • Homeowners insurance premiums rose 7% in 2022 and are expected to have jumped another 9% by the end of 2023. That’s an average 16% increase in just two calendar years.
  • Severe weather, inflation, higher building materials costs, and shortage of skilled labor are largely to blame for the high premiums. Residential building costs have risen 27.7% since 2020; along with construction labor costs rising 11.8% since 2020.
  • Even if you don’t live in a region directly impacted by hurricanes or wildfires, your premiums may still rise as insurers try to compensate for catastrophic events. There were 119 officially designated catastrophes in 2022 up from 90 events in 2019 a 32% increase; catastrophe losses increased to $165 billion in 2022 from $50 billion in 2019 a 212% increase.

Even with these factors, there are some ways we can ensure you continue to have the best possible combination of price and coverage. Here are several to consider:

  1. Consider higher deductibles. This is certainly not a good idea for everyone, but in some cases, it can make sense.
  2. Don’t let your policy cancel or lapse. Unfortunately, carriers are not reinstating coverage as easily as they once did. If your policy lapses or cancels, they may require your premium in full before reinstating. This is across the board for every line of coverage, so make sure to pay all your premiums on time or in advance just to be safe.
  3. Don’t overlook tenure. Switching companies too often can hurt you in the long run. In addition, some carriers won’t take you as a new client if you have less than two years with a carrier. Additionally, carriers are avoiding some risk if a claim occurs in the new business term or if there are too many claims in a 3-5-year period.
  4. If we haven’t already, let’s discuss bundling your home and auto for more discounts and stable pricing. The cost savings on each policy can be as high as 10-15% (or more).
  5. Absorb small claims when you’re able and save for catastrophic losses. Claim frequency is a huge factor in your coverage rates.

If you have any questions or concerns, please don’t hesitate to reach out. Our expert agents are always happy to review your coverage to see if there are any opportunities to lower your premiums prior to renewal. Make sure you are covered with the right protection for your needs, call Laurie Insurance Group in our main Charlotte office at 704-342-2886 or our Southport office at 910-457-6788 or visit us anytime at www.laurieinsurancegroup.com.

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