Insurance
November 25, 2024

Why Home Insurance Costs are Rising and What It Means for You.

How to start saving money

Mattis semper quisque ipsum sagittis tellus nunc facilisis nulla blandit. Quisque tellus viverra ipsum felis pulvinar dui pharetra eleifend. Sed dignissim velit urna neque. Nunc quam pretium ac justo. Neque magna est velit risus sed pellentesque metus quam. Quam ut sem dictum.

  1. Neque sodales ut etiam sit amet nisl purus non tellus orci ac auctor
  2. Adipiscing elit ut aliquam purus sit amet viverra suspendisse potent i
  3. Mauris commodo quis imperdiet massa tincidunt nunc pulvinar
  4. Adipiscing elit ut aliquam purus sit amet viverra suspendisse potenti

Why it is important to start saving

Tempor tortor varius orci adipiscing nec tempor non vel. Lectus cursus feugiat fringilla massa donec commodo dis massa elementum. Sed pellentesque tortor amet eget blandit. Mauris.

How much money should I save?

Ut sed elementum eleifend parturient nascetur euismod. Maecenas tincidunt quis diam diam habitant. Nisl orci dolor facilisis purus et dolor enim. Ut maecenas lacus arcu in cursus morbi odio nibh semper. Morbi turpis iaculis ac proin vitae erat sed. Nec nam a sed egestas amet auctor. Rhoncus adipiscing facilisis aliquam venenatis ullamcorper adipiscing vivamus et amet. Orci vivamus ut quis egestas. Lorem neque vulputate orci in lorem eu commodo urna.

  • Neque sodales ut etiam sit amet nisl purus non tellus orci ac auctor dolor sit amet
  • Adipiscing elit ut aliquam purus sit amet viverra suspendisse potenti
  • Mauris commodo quis imperdiet massa tincidunt nunc pulvinar
  • Adipiscing elit ut aliquam purus sit amet viverra suspendisse potenti
What percentege of my income should go to savings?

In cursus tincidunt ornare scelerisque non. Ipsum tempor nec eget dis sed sed porta mauris. Risus vulputate et magna felis pretium tristique feugiat gravida sodales. Vitae turpis quam massa faucibus purus id. Quam sit facilisis viverra nulla euismod sagittis integer velit. Ac feugiat nisi tempus sem viverra quis risus leo. Pulvinar amet nunc at euismod vulputate. Arcu.

“Nisi quis eleifend quam adipiscing vitae aliquet bibendum enim facilisis gravida neque velit euismod in pellentesque massa placerat”
Do you have any comments? Share them with us on social media

Amet aenean ac est tellus euismod aliquet proin. Vel varius urna egestas ullamcorper justo nisl vulputate elementum. Condimentum diam turpis amet venenatis id facilisis ut eget. Massa nunc tortor nisl pharetra condimentum sed cras. Enim sit tempus est porttitor nisl iaculis in diam eros. Posuere ornare neque ac egestas vitae. Tellus praesent at et enim nec. Enim ornare mauris risus malesuada amet mollis vitae cursus nisi. Nisl elementum felis ultricies.

Why Home Insurance Costs Are Rising and What It Means for You

Home insurance rates across the U.S. are climbing, leaving many homeowners facing tough choices. While states like Florida—hard-hit by hurricanes Helene and Milton—have seen the most dramatic increases, no region is immune.

In 2023, homeowners insurance rates jumped 11.3% on average nationwide, with some states, like Texas and Arizona, experiencing nearly double that increase. Analysts predict another average 6% rise in 2024. Florida leads the pack, where the average annual premium is a staggering $11,000 compared to the national average of $2,377.

What’s Driving the Increases?

The rising cost of insurance stems from several factors:

  1. Frequent and Severe Disasters: Climate change has intensified hurricanes, flooding, and wildfires, making extreme weather events more common. Even smaller-scale risks, like hailstorms and tornadoes, are occurring more frequently and eroding insurers' profits.
  2. Higher Construction Costs: With more expensive homes being built in high-risk areas, repair and replacement costs have soared.
  3. Reinsurance Costs: Insurers rely on reinsurance to cover catastrophic losses, but reinsurance rates increased 35% in 2023, adding to overall costs.

How Insurers Are Responding

To stay solvent, insurers are making significant changes:

  • Higher Premiums and Deductibles: Premium hikes are paired with increased deductibles and reduced coverage limits.
  • Risk-Based Pricing: Homes in high-risk areas for flooding, wildfires, or hurricanes are facing steeper costs.
  • Parametric Insurance: Some insurers now offer coverage based on specific thresholds, like hurricane wind speed, which is less expensive but more limited.

In extreme cases, insurers have withdrawn from markets entirely, as seen in wildfire-prone California and hurricane-prone Florida.

What Can Homeowners Do?

Homeowners can take proactive steps to manage rising costs:

  • Invest in Resiliency: Upgrading your home to meet stricter building codes can reduce risks and potentially lower premiums, and consider installing a Fortified Roof, which was created by the insurance industry to deliver a stronger roof and can help lower premiums.
  • Shop Around: Compare quotes from different insurers to find competitive rates and better terms. Consider adjusting your coverage amount to set a higher deductible amount before insurance coverage kicks in - but make sure you work to save that amount just in case.
  • Consider Other Ways to Reduce Homeownership Costs: Energy bills are often the 2nd or 3rd highest expense behind mortgage and insurance costs.  Consider investing in solar panels and energy efficiency upgrades to drive down that big cost, and increase the value of your home.

Looking Ahead

Reforms are underway in some states to stabilize the market. Florida has reduced litigation costs and streamlined its insurance programs, attracting new carriers to the state. California is allowing insurers to use climate models to set rates more accurately.  Louisiana is investing in Fortified Roof discounts to help jump start adoption of stronger roofs community and statewide, which will eventually lead to lower costs for all.

Long-term solutions, such as improved building codes and thoughtful planning about where homes are built, will be critical to keeping insurance affordable and accessible.

If costs continue to rise unchecked, exposed areas could see declining property values, underscoring the real financial risks of climate change. For homeowners, staying informed and making proactive choices is key to navigating this shifting landscape.

Beth Galante
CEO

20 years of experience in energy efficiency and rooftop solar development, now building Fortifyy.