Here are 4 reasons why homeowners insurance has gone up:
Natural Disasters:  Insurance is a pooled risk, the loses are spread out across all policy holders. That is how you are able to pay $1200 to insure your home for $450,000. Natural disasters have caused the claims payouts to skyrocket over the past few years. In 2023 there were 28 weather events that had losses over 1 billion dollars.
Construction Costs: Insurance companies are not immune to inflation. Employees cost more, contractors are charging more for repairs, and building materials have doubled, tripled, or increased even more. Hypothetically, if your house was damaged and you needed to replace your roof for example, construction and labor fees are at an all time high which correlates to how much it is to insure your home.
House Technology: Our homes are becoming more technological just like our cars. From state of the art security systems to smart thermostats, houses are becoming more expensive to insure.
Lack of Maintenance: An increasing number of homeowners are trying to use home insurance as a maintenance plan. Insurance is designed to cover events that happen suddenly, not wear and tear that took years to occur. Think about a windstorm ripping off shingles or tiles from your roof vs it getting to be 30 years old. When insurance companies get substantial amount of claims for maintenance issues they still have to send out claims adjustor which contribute to higher premiums.
Independent insurance brokerage located in Tempe, AZ. We offer auto insurance, homeowners insurance, life insurance, renters insurance, commercial insurance…
Disclaimer: Coverage will vary on state, insurance company, and type of policy.
Information and data from: https://www.foxbusiness.com/personal-finance/home-insurance-prices-increased-policygenius
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