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When your homeowners insurance policy comes up for renewal in 2024, be prepared for an unpleasant shock: You’re likely to face a premium increase of 10% to 15%, and the price jump could be much higher if you live in an area where there's risk of wildfires or severe storms. That's assuming you can find home insurance coverage at all.
Home insurance costs have soared recently, and policy renewal data shows that premiums have been increasing by more than 20% year-over-year, according to separate reports from insurance firm Matic and insurance marketplace Policygenius released in late 2023.
According to Matic, the national average annual cost of home insurance climbed to about $1,700 in 2023, up from $1,175 in 2019.
Rising prices have added stress on household budgets, and the number of people skipping home insurance coverage altogether has also soared.
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While the rate of inflation in home insurance prices is expected to slow down this year, Stuart Winchester, founder and CEO of Marble, says he’s counseling customers to still expect 10% to 15% hikes. That would translate to premium increases of $100 to $250 for the year — or hundreds more for customers in areas where home values or insurance rates are higher.
Citing a “rise in catastrophic events nationwide,” Matic predicts that insurance companies will continue to significantly increase premiums because they need to pass along their higher costs to policyholders. However, “as inflation slows down in 2024, it’s not likely that premiums will rise at the record-high rates seen in 2023.” Notably, construction costs soared during the pandemic, but should be more stable going forward as inflation cools.
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FAQs
While the rate of inflation in home insurance prices is expected to slow down this year, Stuart Winchester, founder and CEO of Marble, says he's counseling customers to still expect 10% to 15% hikes.
How much will homeowners insurance increase in 2024? ›
While an intense hurricane season has the potential to cause premium increases next year, Insurify predicts Americans will see a more modest premium increase of 6% in 2024, putting the average annual homeowners insurance rate at $2,522 by the end of the year.
Why is my homeowners insurance going up every year? ›
Why did your homeowners insurance go up? (Updated May 2024) The increase in expensive natural disasters and higher-than-average labor and construction costs have caused home insurance rates to skyrocket. Pat Howard.
Is homeowners insurance going up because of inflation? ›
Insurance rates have been climbing for a number of reasons: Storms have become more frequent and severe, inflation and labor shortages have driven up the cost of repairs and home values have increased, requiring larger policies.
Why are my home insurance quotes so high? ›
Homes in high-risk areas typically have higher premiums. Insurance companies assess the risk associated with your area by looking at the likelihood of severe weather, such as floods, wildfires, and hurricanes, local crime rates, and your home's proximity to a fire station.
What state has the cheapest homeowners insurance? ›
Cheapest States for Homeowners Insurance
- Hawaii: $380 a year.
- Nevada: $883 a year.
- Vermont: $895 a year.
- New Jersey: $968 a year.
- New Hampshire: $970 a year.
State Farm offers the cheapest homeowners insurance at $174 per month on average, according to a comprehensive review by the MarketWatch Guides team. According to data obtained from Quadrant Information Services, the average cost of a homeowners insurance policy is $2,511 annually or $209 per month.
What is one way to reduce the cost of a homeowners insurance policy? ›
Raise your deductible
Deductibles are the amount of money you have to pay toward a loss before your insurance company starts to pay a claim, according to the terms of your policy. The higher your deductible, the more money you can save on your premiums.
Does credit score affect home insurance? ›
Typically, the higher your credit rating, the less you will pay for home insurance in the states where credit is considered a rating factor. Although it is only one factor in setting rates for home insurance, data shows that the credit-based insurance score is an important one.
Why did my home insurance double? ›
There are many reasons why your homeowners insurance rate could go up. You may get hit with an increase if you live somewhere that's prone to adverse weather. Inflation and your claim history could also play a role. Fortunately, there may be steps you can take to save money on your insurance costs.
Factors such as longer repair times and more expensive rental car costs are resulting in rising prices, according to a report by the American Property Casualty Insurance Association. Also, cars are becoming costlier to fix.
Why is my dwelling coverage so high? ›
Another reason your dwelling coverage might be higher than the sale price is if the home is in an undesirable area, which lowered the market value. Certain homes that are older may also yield higher dwelling coverage.
Why did my home insurance go up in 2024? ›
Average cost of home insurance is rising
We predict a continued increase in 2024. Here are some of the reasons why: Inflation and other economic factors. Material goods (lumber, roofing materials, etc.)
Is it normal for home insurance to increase every year? ›
The insurance industry references the Consumer Price Index to measure inflation and adjusts rates accordingly. It's one big reason why property owners find that their home insurance keeps going up year after year, even if nothing's changed on their property.
How many quotes should you get for homeowners insurance? ›
When calculating how much coverage you need, it helps to know what it could cost to rebuild your home. You can usually determine an approximate cost per square foot based on local building rates. Obtain quotes from at least three insurance companies to find the best coverage and rates.
Is house insurance cheaper without a mortgage? ›
And finally, buying a house without a mortgage will lower the cost of your house insurance. Once you've paid off your mortgage, you aren't federally required to have homeowners insurance. Though this will save you the most money, it is a risk you must be willing to take.
What area of Florida has the lowest home insurance rates? ›
– The Florida Office of Insurance Regulation issued its first Property Insurance Stability Report for 2023 last week. On a county-by-county basis, it found that Sumter County has the lowest average cost for single-family home property insurance at $1,533, while Monroe County had the highest average cost at $7,162.
Why is USAA homeowners insurance so expensive? ›
USAA homeowners' insurance tends to be more expensive due to its commitment to high standards for comprehensive coverage, superior customer service, and consideration of location-specific risk factors.
