Navigating Rising Home Insurance Costs: Strategies for Buyers and Owners

These days, Americans need to consider if they can afford to insure their home, even if they can afford to buy one.

According to insurance comparison company Insurify, almost thirty percent of American homeowners are concerned about rising home insurance costs.

In the previous year, home insurance costs increased by 19%, or $273 on average per policy, as per a Guaranteed Rate Insurance report. Prices increased by 55% from an average of $1,108 in 2019 to $1,723 in 2023, according to the insurer.

And there might be more rises to come. According to Insurify, there might be a 23% rise in states experiencing extreme weather this year.

According to Bill Gatewood, national leader of personal insurance practice at insurance broker Burns & Wilcox, “affordability is becoming an issue in a great number of parts of the country. Some parts have difficulty even getting insurance.”

Why is the cost of my homes insurance increasing so much?

Inflation: The price of labor, materials, and other items associated with home maintenance and repair has increased.

Weather: The frequency and intensity of weather-related events have grown.

For instance, 2023 experienced record-breaking summer temperatures as well as the highest number of billion-dollar weather-related disasters in a calendar year—28 distinct weather-related and climate-related disasters totaling at least $1 billion.

And prior to that, the National Weather Service said that 2022 set a record for tornadoes.

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Which states charge the highest rates for homeowner’s insurance?

Severe weather occurrences are more common in the states with the highest rates of house insurance. According to Insurify, hurricane-prone states include Texas, Florida, Louisiana, Mississippi, and Arkansas.

According to it, the risk of wildfires is rising across Texas, California, Colorado, and Nebraska. Texas, Kansas, and Nebraska are all very susceptible to tornadoes.

According to Insurify, the top three most costly states are as follows:

  • The average yearly cost in Florida is $10,996, and this year’s cost is predicted to increase by 7% to $11,759.
  • Louisiana’s yearly average, at $6,354, is expected to rise by 23% this year, the highest percentage increase of any state, to $7,809.
  • Oklahoma’s annual average is $5,444, and it is expected to rise by 5% to $5,711 this year.

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Should the price of my house insurance determine whether or not I acquire it?

Insurance experts advise asking your insurance agent about possibilities and consulting with your financial adviser to develop a payment plan.

For instance, your yearly insurance in Florida is $25,000. Of that, $20k is for wind exposure. You can think about putting aside some of your own funds to cover any damage and save $20,000 in a given year if the house has new shutters and a new roof.

In order to ensure that you have funds set aside to cover any potential losses, your financial advisor can assess your assets and cash flow and offer advice on “what to do in that case” or “suggest taking the savings and put it into an account and invest it,” he said.

How can the price of a homeowners insurance coverage be lowered?

Look around. “Homeowners frequently don’t shop around and lock in a rate and insurance company,” stated Michael Maerten, the chairman of the board of Tri-County Suburban REALTORS, the neighborhood real estate group. “Every year, they ought to receive a comparison rate.”

Your rates will decrease with a higher deductible, according to Maerten. According to a report by Guaranteed Rate, between 2019 and 2023, the percentage of Americans with $5,000 to $10,000 deductibles increased by 49%, while those with $500 to $2,500 deductibles had only minor decreases.

A percentage deductible, which determines your deductible based on a proportion of your home’s worth, is something to think about if you have wind or hurricane coverage. According to Gatewood, “Your house’s value increases every year, so the deductible is higher.”

According to Guaranteed Rate, between 2019 and 2023, 1% to 2% percentage deductibles increased by more than 200%, while 2% to 5% deductibles increased by 3,000%.

Make improvements to your home. Gallagher stated, “This is more important now than it used to be.” The age of the plumbing, electricity, furnace, water heater, roof, and other systems could prevent you from getting insurance from some providers.

Makeover or strengthen your home. Don’t let combustible mulch build up or tree limbs dangle over your house if you live in a wildfire-prone location. Install shutters if you live in a hurricane-prone area.


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