Homeowners insurance rates have been on the rise in recent years, and there are several reasons for this trend. The rising rate of home and auto insurance is becoming increasingly unaffordable for many Americans. The average cost of Home insurance increased by 8% last year.
One of the main reasons for the increase in home insurance rates is the rising cost of building materials. It has led to higher-than-average labor and construction costs due to inflation and expensive natural disasters. Additionally, severe weather conditions such as wildfires, hurricanes, and flooding have caused serious damage and costly claims. So it has led many home insurance companies to raise premiums and become more selective in who they insure.
It’s important to note that rates are expected to continue to climb in 2024 due to these factors. However, there are steps you can take to lower your premiums. For example, you can consider increasing your deductible, bundling your home and auto insurance policies, and improving your credit score to get the cheapest homeowners insurance.
Why are costs rising?
Homeowners insurance rates have been on the rise in recent years, with the steepest hikes being recorded in states like New Mexico, Arizona, and South Dakota. The scenario for rate increases in the USA in 2024 appears to be a mixed bag, with some regions likely to experience stability or even a reduction in rates, while others may face the likelihood of further increases. Here is an overview of the key trends:
Potential for Stabilization and Rate Relief:
- Fitch Ratings predicts that the property/casualty insurance industry will perform better in 2024. This positive trend is expected to be driven by factors such as better personal auto performance and moderate claims severity trends. As a result, some regions may experience a more stable environment.
- The market capacity is bound to increase, with new entrants and existing carriers’ increased risk appetite, leading to more competition and a definite downward pressure on rates in certain areas.
Continued Rate Increases:
- North Carolina Rate Increases Case: The North Carolina Rate Bureau requested a 42.2% statewide average increase in homeowners insurance rates, highlighting the potential for significant hikes in some states.
- Underlying Risk Factors: Factors such as natural disasters, rising construction expenses, and inflation are causing an increase in costs across the country.
Regional Variations:
- High-Risk Areas: Coastal areas prone to hurricanes and other natural disasters might see the most significant increases.
- Low-Risk Areas: States with fewer natural disasters and stable housing markets might experience smaller increases or even rate stability.
Homeowners Insurance Rate Increases in the USA by States in 2024
| State | Average Increase % | Highest Local Increase | Lowest Local Increase |
|---|---|---|---|
| Alabama | 5.6% | Mobile (9.8%) | Birmingham (2.5%) |
| Alaska | 4.2% | Anchorage (6.5%) | Fairbanks (2.1%) |
| Arizona | 12.3% | Phoenix (15.2%) | Tucson (9.4%) |
| Arkansas | 6.8% | Little Rock (8.7%) | Fayetteville (4.9%) |
| California | 8.9% | Los Angeles (12.1%) | San Francisco (6.8%) |
| Colorado | 7.6% | Denver (9.3%) | Colorado Springs (5.7%) |
| Connecticut | 6.1% | Hartford (7.2%) | New Haven (5.1%) |
| Delaware | 5.2% | Dover (6.3%) | Wilmington (4.1%) |
| Florida | 10.2% | Tampa Bay (14.5%) | Jacksonville (8.9%) |
| Georgia | 7.1% | Atlanta (9.2%) | Savannah (5.2%) |
| Hawaii | 4.5% | Honolulu (5.6%) | Hilo (3.4%) |
| Idaho | 5.9% | Boise (7.1%) | Twin Falls (4.8%) |
| Illinois | 6.6% | Chicago (8.4%) | Springfield (4.6%) |
| Indiana | 5.7% | Indianapolis (7.0%) | Fort Wayne (4.5%) |
| Iowa | 5.3% | Des Moines (6.4%) | Cedar Rapids (4.2%) |
| Kansas | 9.8% | Wichita (12.0%) | Topeka (7.7%) |
| Kentucky | 6.2% | Louisville (7.2%) | Lexington (5.1%) |
| Louisiana | 11.7% | New Orleans (14.8%) | Baton Rouge (9.6%) |
| Maine | 5.8% | Portland (7.3%) | Bangor (4.7%) |
| Maryland | 5.5% | Baltimore (6.6%) | Annapolis (4.3%) |
Home Insurance Rate Increases by Years
| Year | Average Increase (%) |
|---|---|
| 2023 | 8.5% |
| 2022 | 10.5% |
| 2021 | 4.3% |
| 2020 | 2.8% |
| 2019 | 3.1% |
| 2018 | 4.8% |
| 2017 | 3.2% |
| 2016 | 3.6% |
| 2015 | 3.0% |
| 2014 | 2.2% |
| 2013 | 2.5% |
