4 Insurance Trends Affecting Homeowners Right Now
Reading time • 5 minutes
By Matic
The home insurance industry has faced some serious challenges over the last few years, and those hurdles have also affected homeowners. Major storm events and inflation are two major factors that are driving up premiums and leading to fewer available policies. If you own your home, you’re probably feeling the pinch. Here are four insurance trends currently impacting homeowners — plus ways to keep more money in your pocket while staying adequately covered.
1. Your rates have increased significantly
Many homeowners are watching their premiums go up — even if they haven’t filed claims or experienced any issues. Recent Matic research found that those who renewed their policies in 2023 saw an average increase of 23.7%. That puts the average premium at roughly $1,700. For some context, that number was $1,175 in 2019. So, what gives? There are multiple factors at play. Inflation is increasing the cost of consumer goods, which includes materials needed to make home repairs. And if your home needs to be rebuilt, you can expect it to cost more than it did a few years ago.
Your premium might also go up if you live in an area that’s prone to adverse weather events like wildfires or hurricanes. Texas, California and South Carolina are seeing particularly big rate increases nationwide, but the truth is that premiums are rising everywhere. The uptick in natural disasters has led to serious losses for insurance companies — and many carriers are bumping up their rates for new business and existing policyholders.
What it means for homeowners
The cost of your policy could go up significantly. Your deductible could increase as well. If you file a claim that gets approved, you’ll have to pay up to this amount before your insurance kicks in.
2. Your carrier didn’t renew your home insurance policy
Major insurance carriers across the country are deciding not to renew certain policies. Climate change is a likely culprit. In 2022 alone, natural catastrophes accounted for over $79 million in insured losses, according to the Insurance Information Institute. In Florida, which is at risk for hurricanes, AAA, Progressive, Farmers, and several other companies have scaled back. This trend is playing out in other high-risk areas like California. Raising premiums is an alternative, but insurers need to get approval from the Department of Insurance first — and many requests have been delayed or denied altogether.
What it means for homeowners
This is leaving many homeowners with fewer options when it comes to home insurance carriers. From 2022 to 2023, Matic research found a 35% decrease in available policies per homeowner. That could leave you stuck with a policy you aren’t really happy with. In some cases, it might be difficult to find coverage at all.
Not surprisingly, some homeowners are moving to “insurers of last resort.” In Florida, that’s Citizens Property Insurance Corporation. This state-run program is available to homeowners who can’t find coverage from a Florida-authorized insurance company — or if premiums are more than 20% higher than a similar policy offered by Citizens. The California FAIR Plan follows the same idea, but coverage may be limited.
3. Your policy was canceled before it started
Home insurance carriers are getting stricter when it comes to approving new policies. Underwriting standards are becoming more rigid — and it’s possible to get dropped before your coverage even begins. When taking out a new home insurance policy, more people can expect insurers to visit the home and assess their risk of filing a future claim. If they find something serious, like a roof that needs to be replaced, the underwriting team may not give you the stamp of approval.
What it means for homeowners
Tighter underwriting guidelines could be why more online quotes are being declined and why home inspections are occurring more frequently. If you’re buying a home and are unable to secure insurance, your mortgage lender will likely deny your loan application.
4. You were required to get a home inspection
Insurance companies can require a home inspection at any time — not just when you’re initiating a new policy. If the carrier orders an inspection and discovers something that increases their risk, you may have to address it to remain covered. Let’s go back to the example of a damaged roof. The carrier could decide not to renew your policy if you don’t make the necessary repairs. In some cases, a home inspection can also lead to higher premiums. That could happen if you’ve added an “attractive nuisance” like a swimming pool or trampoline to your home.
What it means for homeowners
Carriers are doing this more often as a way of assessing risk — and it could be an unwelcome surprise. Your best defense is to familiarize yourself with the home inspection process and keep up with regular maintenance. Pay attention to your roof, gutters, windows, doors, foundation, and garages. Also tend to your home’s major systems (heating and air conditioning, plumbing, electricity, etc.) regularly.
How can I lower my rate or find a new insurance option?
The good news is that there are ways to save money on homeowners insurance. Consider the following tips:
- Bundle your home and auto policies.
- Increase your deductible, which should reduce your premium.
- Review your coverage and adjust as needed. Let your risk tolerance and financial situation be your guide.
- Reduce your monthly escrow amount.
Shopping around and comparing insurers is probably your best bet. Seeing different rates and coverage options side by side can help you find the best policy for you. That’s where Matic comes in. Instead of researching individual insurance carriers, you can compare options from more than 40 insurers — it’s that easy.
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