September 27, 2023

There is no shortage of reasons your home insurance rates may have gone up, but the likely culprits in 2023 remain higher-than-average labor and construction costs due to inflation and expensive natural disasters.

Around a month before homeowners insurance renewal, your insurer will notify you of any changes to your coverage or rates for the coming year. Most years, these changes are either nonexistent or just small enough for homeowners not to notice. But in 2022, homeowners in every part of the country saw their insurance rates go up by hundreds, even thousands of dollars in certain states.

In fact, home insurance premiums were up an average of 21%, according to a Policygenius analysis of policy renewals from May 2022 to May 2023. For homeowners whose premiums went up, the average increase was $244. In this guide, we’ll help you understand why this may have happened, share insurance rate predictions for 2023, and what you can do to lower your premiums.

Home insurance rate predictions for 2023

While inflation is expected to decline from 2022 to 2023, it still remains higher than historical averages — meaning homeowners will continue to see an impact on their insurance premiums this year due to above-average construction costs. [1] Add to this the continuing labor shortages in the construction industry, and home insurance rates likely won’t be going down in 2023. 

This rings especially true for homeowners in states at high risk of costly natural disasters, like those in hurricane-prone Florida and wildfire-ravaged California. As it becomes increasingly more difficult for homeowners in high-risk areas to find coverage on the traditional market, S&P Global is predicting an increase in policies through excess and surplus (E&S) insurers in 2023. 

E&S insurers are able to offer coverage to high-risk homeowners since they’re not part of the admitted (AKA traditional) insurance market. This means they don’t have to run policy forms or rate increase requests by their state’s department of insurance. In turn, they can take on more risk — and charge higher insurance premiums to offset that risk.

Why did my homeowners insurance go up? 5 factors behind rising home insurance premiums…CONTINUE READING HERE!