Homeowner's insurance quotes are rising fast. Here are tips for buyers and owners to cope

homeowner's insurance quotes are rising fast. here are tips for buyers and owners to cope

The storm damaged Bertha Gonzalez's home on Tuesday, Dec. 13, 2022, near Decatur, Texas. Three adults and children were inside the Gonzalez family home as a possible tornado swept through just after 7 AM. The insurance company assessed the damage, and a hotel room was secured for the family through Jan. 27, 2023.

Even if you can afford to buy a home these days, Americans must ask themselves if they can afford to insure it.

Nearly 30% of American homeowners are nervous about rising home insurance rates, according to insurance comparison site Insurify.

Home insurance prices jumped 19%, or on average $273 per policy, last year, according to a study by Guaranteed Rate Insurance. The insurer said prices surged 55% from an average of $1,108 in 2019 to $1,723 in 2023. And more increases may be on their way. Insurify forecasts some increases this year as high as 23% in states with severe weather.

Start the day smarter. Get all the news you need in your inbox each morning.

“Affordability is becoming an issue in a great number of parts of the country,” said Bill Gatewood, national personal insurance practice leader at insurance broker Burns & Wilcox. “Some parts have difficulty even getting insurance.”

Why is my homeowners’ insurance going up so much?

The two main reasons are:

  • Inflation – the cost of everything related to homebuilding and repairs, like materials, parts and labor, has risen.
  • Weather – weather-related events have increased in frequency and intensity. For example, 2023 saw record-high summer temperatures and 28 separate weather and climate disasters costing at least $1 billion, the highest number of billion-dollar disasters in a calendar year. And before that, 2022 was a record year for tornados, the National Weather Service said.

Which states have the most expensive home insurance?

The states with the highest home insurance costs are prone to severe weather events. Arkansas, Florida, Louisiana, Mississippi and Texas are vulnerable to hurricanes, Insurify said. California, Colorado, Nebraska and Texas face growing wildfire risk, it said. And Kansas, Nebraska and Texas, are highly vulnerable to tornadoes.

The top three most expensive states, according to Insurify, are:

  • Florida averages $10,996 annually, and that cost is expected to rise by 7% to $11,759 this year.
  • Louisiana’s annual average is $6,354, which is seen rising this year by 23% —the largest predicted increase among states to $7,809.
  • Oklahoma averages $5,444 per year, and that’s forecast to increase 5% to $5,711 this year.

Should I avoid buying a home in these states?

Not necessarily. Home insurance is “very street specific,” said Paul Gallagher, senior vice president at insurance broker NFP, an Aon company.

Instead, “when you get an address for a house you’re looking at and considering putting an offer in, put in some research before getting the mortgage application,” he said.

Talk to your insurance agent to check the home’s flood zone, wildfire or earthquake risks. Your insurance agent can determine if the home is insurable, if you’ll have to go to a state insurer, and how high the premiums may be.

Should home insurance costs dictate if I buy the house?

Ask your insurance agent for options and loop in your financial adviser to create a plan to pay for it, insurance experts suggest.

For example, you’re in Florida and annual insurance costs $25,000, with $20,000 of that expense for wind exposure. If the home has new shutters and a new roof, you might consider setting aside some of your own money to pay for potential damage and save $20,000 in a given year.

“It’s very risky, but more people are doing it,” Gallagher said. “It’s usually a very high deductible for wind anyway, so damage has to be significant” before insurance applies.

Your financial adviser can look at your assets and cash flow and help you decide, “what to do in that case or suggest taking the savings and put it into an account and invest it” so there’s money there to pay for any potential damage, he said.

Check out the list: Best homeowners insurance companies of May 2024

What are ways to reduce the cost of a homeowners insurance policy?

  • Shop around. “Homeowners often lock in a rate and insurance company and don’t shop around,” said Michael Maerten, chairman of the board of Tri-County Suburban REALTORS, a local realtor association. “They should get a comparison rate every year.”
  • Higher deductibles will lower your premiums, Maerten said. Guaranteed Rate said in its study that the share of Americans taking deductibles between $5,000 to $10,000 jumped 49% between 2019 and 2023 compared to slight declines for those taking $500 to $2,500 deductibles.

If you have wind or hurricane coverage, consider a percentage deductible, which calculates your deductible based on a percentage of the value of your home. “Every year the value of your house goes up, so it takes the deductible higher,” Gatewood said. Guaranteed Rate said it’s seen 1% to 2% percentage deductibles increase by more than 200% between 2019 and 2023, while 2% to 5% deductibles have surged by 3,000%.

  • Bundle. Consider using one insurer for auto, home and possibly, even life, because companies often offer discounts for more than one policy.
  • Update your house. “This is more important now than it used to be,” Gallagher said. “The age of the roof, water heater, furnace, electrical and plumbing – if they’re old, they could disqualify you for insurance from certain insurance companies.”
  • Clean up or fortify your house. If you live in an area prone to wildfires, don’t allow tree limbs to hang over the house or flammable mulch to accumulate. If you live in an area with hurricanes, install shutters.

Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at [email protected] and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.

This article originally appeared on USA TODAY: Homeowner's insurance quotes are rising fast. Here are tips for buyers and owners to cope

OTHER NEWS

1 hour ago

Red Sox DH says he misses playing in the outfield

1 hour ago

Cubs vs Giants: June 25, 2024 game notes, betting odds, etc.

1 hour ago

Queues on new A27 roundabout 'beyond frustrating'

1 hour ago

Daniel Ezra Is Leaving “All American ”After 6 Seasons: 'Spencer's Goodbye'

1 hour ago

Peso slightly stronger; PSEi gains more ground

2 hrs ago

Brewers acquire former Cy Young winner in trade

2 hrs ago

Marcos leads opening of PH’s biggest hotel

2 hrs ago

Marcos vows maritime industry modernization

2 hrs ago

Pentagon chief, Russian defense minister discuss open lines of communication

2 hrs ago

Vitamin C for sensitive skin — now possible

2 hrs ago

Are Wrexham playing Birmingham City in USA? Ryan Reynolds responds to reports of EFL game vs. Tom Brady team in United States

2 hrs ago

‘Pink or Fake?’: Authenticity of viral ‘rare pink dolphin’ photos in North Carolina questioned

2 hrs ago

Luzon mayors ask Marcos to stop plan to revive e-sabong

2 hrs ago

'Every trench' in Ukraine needs a close-range electronic warfare shield against drones and other threats, top official says

2 hrs ago

German minister wants up to 15 billion eur munitions deal, says source

2 hrs ago

Reporter addresses latest NFL position group to see market value drop

2 hrs ago

‘Red One' Trailer: Dwayne Johnson and Chris Evans Team Up to Rescue a Kidnapped Santa Claus in Prime Video's Christmas Action Movie

2 hrs ago

Last-Minute Law on Restaurant Fees Inches Toward Approval Ahead of July 1 Deadline

2 hrs ago

Should You Buy the Dip In Nvidia Stock? Here's What the Fundamentals Say

3 hrs ago

Mendoza, Alburo win, earn finals spots

3 hrs ago

S&P trims PH 2024 growth forecast to 5.8%

3 hrs ago

“SEAL Team” Final Season Trailer Teases 'One Last Ride' for David Boreanaz's Bravo Team

3 hrs ago

Hong Kong court edges closer to sentencing democracy activists involved in unofficial primary

3 hrs ago

Crumbl Is Making Cookie Cereal & Fans Are Divided

3 hrs ago

Verizon to pay $1 million fine over 911 call outage in 2022

3 hrs ago

Triumphs in collaborative architecture and design

3 hrs ago

Paul McCartney, 82, amazes fans with dance moves at Taylor Swift’s concert

3 hrs ago

Boaz Weinstein Says Biden Is Better for Bond Market Than Trump

3 hrs ago

Exxon Plans New Guyana Oil Project to Lift Output Into 2030s

3 hrs ago

Thea Gagate eager to help ZUS Coffee rise after winless campaign

3 hrs ago

Barbie Forteza shows admiration for Kathryn Bernardo, hopes to work with her

3 hrs ago

Meralco braces for wet season

3 hrs ago

How to Make Millions Before Grandma Dies: a movie review

3 hrs ago

BIR removes eCAR 5-year validity period

3 hrs ago

Abante: Past drug war deceitful, don’t vote for anti-human rights bets

3 hrs ago

Julia Coronel shines in PVL Rookie Draft combine

3 hrs ago

Scottie stand-in Dwight Ramos long groomed by coach Tab for PG role

3 hrs ago

Introducing the Yaber Projector T2/T2 Plus: Battery-Powered Portable Projector with Native 1080P Resolution

3 hrs ago

Bronny James draft odds: Lakers still favored for LeBron's son, but several sleepers could take him earlier

3 hrs ago

I’m Upper Middle Class: 7 Financial Steps I Wish I’d Taken Sooner