The State of the Home Insurance Market:

The home insurance market has undergone significant changes in the past year and a half. There are numerous factors behind these changes, and I'll discuss several key aspects. Since March 2019, I have written over 900 home insurance policies, witnessing firsthand the shift in the market. For instance, the average home insurance premium was around $1,200 per year, but as of 2024, it has risen to approximately $2,100 per year, based on my observations of average costs.

What has driven such a dramatic change in the last 3.5 years? I believe it boils down to the overall health of the economy. Consumers are struggling with savings as the cost of everything, from milk to homeowners insurance, has soared by 50-75% over the past year. Meanwhile, wages have remained stagnant. The surplus in household funds has dwindled, leading more people to file insurance claims instead of paying out of pocket. For instance, a homeowner might think, "I'd rather pay a $1,000 deductible to fix my gutters than $3,000 from my own pocket." While this seems like a smart immediate saving of $2,000, it's not as beneficial in the bigger picture. An increase in small claims puts pressure on insurance companies' bottom lines. The only recourse for these companies is to raise premiums, creating a lose-lose situation.

The value of the American dollar has diminished, and along with it, the savings of many households. As the prices of goods rise, so does the cost of materials needed to rebuild homes. This increase necessitates higher coverage to replace homes in the event of total loss, which, in turn, leads to higher insurance rates. Navigating the insurance market has become increasingly challenging.

That's where the need for a trustworthy insurance advisor becomes crucial. We aim to provide honest guidance and help you navigate this tough marketplace. If you have any questions about any line of insurance, please feel free to email or call us.

-SteinTalk