If you recently renewed your homeowner's insurance policy, you may have noticed that your rate is higher than usual. That’s because the majority of states gave insurers the green light to raise their prices, essentially making premiums more costly for property owners.
Want to know more about why your homeowner’s insurance went up in 2022, keep reading.
Inflation and other factors are driving homeowner’s insurance rates up in 2022.
If you’re like most people, you’ve probably been feeling the effects of rising inflation. From gas prices to the cost of food, everything seems to be getting more expensive. Sadly, home insurance rates aren’t exempt. You see, several factors are used to determine the price of home insurance rates, including where your home is located and how much it costs to rebuild it.
So, if the supplies needed to build a home rise in price along with the cost to hire workers to build it (which they have), then insurance companies are forced to reassess their rates and possibly even increase them. As inflation continues to drive prices upward, it’s contributing to the increase in your insurance rates.
You can also thank natural disasters for higher home insurance premiums.
Another factor that's causing homeowner insurance to become more expensive for property owners is the increase in natural disasters. If your home is located in an area that is prone to be hit with natural disasters or they have become more frequent or severe nearby, your insurer may have raised their rates because of it.
Truth is, the world is experiencing significant changes in weather, primarily due to climate change, and homeowners are now having to pay the price for it.
In 2021, the National Oceanic and Atmospheric Administration's (NOAA) Climate division said that the U.S. experienced 20 weather and climate disasters that caused nearly $145 billion in damage. This put 2021 “in second place for the most disasters in a calendar year,” according to the NOAA.
Because conditions aren’t getting any better, insurance carriers have to increase their costs to ensure they are able to cover the serious damage these harsh natural disasters are causing.
These five states had the highest increase in homeowners insurance rates in 2022.
According to the Policygenius Home Insurance Pricing Report, these five states had the highest increase in home insurance rates so far this year:
- Arkansas – The average insurance premium price went from $1,184 to $1,345, or an increase of 18.5 percent.
- Washington – The average insurance premium price went from $739 to $873, or an increase of 18.1 percent.
- Colorado – The average insurance premium price went from $1,355 to $1,593, or an increase of 17.5 percent.
- Texas – The average insurance premium price went from $1,476 to $1,713, or an increase of 16 percent.
- Oregon – The average insurance premium price went from $528 to $609, or an increase of 15.4 percent.
These five states had the lowest increase in home insurance rates in 2022.
Policygenius’ data also revealed the states with the lowest increase in homeowner’s insurance rates. These include:
- New York – 8 percent
- Connecticut – 9.5 percent
- California – 9.9 percent
- New Jersey – 10 percent
- Tennessee – 10 percent