Wildfires in California. Hailstorms in the Midwest. Hurricane Ian in Florida & South Carolina. It’s a crazy year for home owners insurance.
On top of that add in the crazy inflation in the home construction market. After two white-hot years, only now are home prices starting to slow down from higher interest rates.
We just got our 2022-2023 premium statement from State Farm. We received it even before we’ve had to pay our roofer for the $65K job they did following our May hail storm. The bad news was that it is up double-digits, the good news is that it is just barely double-digit inflation.
Our new premium rate is $3.4K/year – up 10.2% versus last year.
That’s a big increase for sure, but not nearly what it could have been. Last year, homeowners insurance went up only 2% nationally, according to a report from Quote Wizard, but there is a lot of volatility state-by-state, depending on catastrophic events.
Last year Idaho was up 34% while Kentucky declined -25%. Our state, Minnesota, was pretty flat last year, but I expected we’d be through the roof going forward. I’m thankful that is not the case.
How is your homeowner’s insurance premium tracking for the upcoming year?
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MrFireStation 
These days, we have two speeds: Ugly & Uglier. Living on the Atlantic coast is always a risk. Insurance companies want profit. I invest in some. I employ some. I pay lots to sleep nights. Watching Hurricane Ian’s big waves break 300 feet from my front window as I write, tells me the cost of living my dream never goes down.
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The combination of my homeowners, auto insurance, earthquake, and umbrella policies are up around $1,400 year over year. I had my insurance agent out to adjust the replacement cost upwards after finding out what my neighbors are spending to build around me.
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That seems like a huge increase on a % basis. Our insurance replacement value is supposed to adjust automatically, but I’m thinking it’s a good idea to sit down with the insurance guy and maybe comparison shop his prices.
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Have you ever had a ‘big one’ hit your place there? I’m not sure how far north those storms go.
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Oh yes. Hurricane of 38 killed hundreds in our RI beach towns. A decade ago, Superstorm Sandy devastated our shore. 7 neighbors were required to demolish their homes and rebuild. Our 110-year-old classic still stands, but was battered. Regular home insurance paid for new roof. Federal Flood insurance paid squat, leaving me to find extensive repairs. But my bank requires me to have it. Now one year of insurance costs more than they have ever paid out to us since 1970’s. More government inefficiency and ineffectiveness. I’d like to fire them all!
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Wow – I didn’t realize how far north the storms could reach. Or, how worthless the federal flood insurance was. I would have thought you’d be safe on both accounts!
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Much of the recent increase is attributed to construction costs. Not only material and labor, but if your house is untenable, the time to rebuild has been extended longer than it has been historically and thus increase in additional living expenses for temporary housing.
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Good point. I can’t imagine what they are going to do with construction timelines in Florida. We have friends that have a house under construction for the last 20 months.
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I checked my year over year and it looks like my $1400 increase works out to around 13%. I have been with the same company for 33 years without a claim. The loss profile in my area is likely very big losses when they do happen.
My big concern is liability for auto accidents. Earlier this year I got called into jury duty and was in a jury selection pool for a woman who was walking through a parking structure and a car backed into her. She claimed it caused her to fall and had to have a shoulder replacement. The driver’s auto insurance had already paid her medical bills in full, and offer her $100K for pain and suffering. Her attorney was asking for $6 million for pain and suffering damage.
The plaintiff looked okay to me, and as an engineer, I expressed my disbelief that someone backing out of a parking spot in tight quarters could be going fast enough to cause that much harm. Of course the plaintiff and her attorney believed that she had no personal responsibility for making eye contact with the driver before walking behind her car. She comes from a community that is notorious for staging accidents. I was dismissed immediately after expressing my skepticism.
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We carry a $5m umbrella policy. Maybe that’s not enough. Any idea how much she actually got?
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I carry the same. I have no idea how much she got. The Plaintiffs Attorney probably did not want me on the jury, because I would have tried to talk the other jurors in awarding Attorney’s Fees to the Defense.
I have had two accident stagers try to make a claim against my auto insurance and both cases I immediately called State Farm and asked to speak with their fraud department. Pictures that are taken at the scene before anyone has a chance to move their vehicles helps a lot. In one of the cases, the person parked next to my 1 ton truck that my wife drove to gym because I was working on her car that day. The person put some sort of paint on the side of the car and claimed my wife clipped her car pulling in to park.
One of the pictures showed the insurance fraudster’s Escalade was parked six inches away from my vehicle. The insurance adjuster ask my wife if she had to get out of the passenger’s side. No, then there was no way that vehicle was parked there because the vehicles were parked too close together.
When my wife got home the white paint washed off. I asked State Farm to send a photographer out to take a picture of my vehicle that was perfect. The scammer sent me text of the body shop estimate for $3,900. She must have had a fortune telling estimator, because the date preceded the date of the alleged accident by three days.
My takeaway from this is do legwork for your insurance company and press the case for fraud. I hear stories from people all the time, whose insurance company paid the scammers off as a cost of doing business. I was willing to press charges of insurance fraud against the woman.
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Wow – I never hear of claims of staged accidents. I wonder if states treat claims differently that make it more difficult here. We’re a “no fault” state where everyone’s insurance pays their own claims. Does it work that way in CA?
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I’m coming to the end of my second year with my current insurance company. I shop around every year, and if I find someone that can beat the renewal price by 4-5% I make the switch. It happens every 2-3 years.
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That’s a pretty significant savings. I’ve clearly been dependent on one company for too long!
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Great question about differences in states and No-Fault. California had a Proposition to go to No-Fault Insurance in 1993. The logic behind the Proposition was that there were uninsured motorists who if you hit them, your insurance will pay to fix their vehicle and other damages. If they hit you, your uninsured motorist rider kicks in and your company still ends up paying. This drivers were drawing from the insurance pool without helping to pay for it. The other thought about No-Fault insurance was that you could buy ample insurance to cover your expensive vehicle and cover medical expenses. You would be keeping the outcome of accidents under your control, instead of relying on others who are unreliable and perhaps only buy the state mandated minimum.
This story gets crazy. I was in a downtown Superior Court, and walked past a bunch of Family Law Attorneys complaining about the Proposition because they feared Personal Injury Attorneys wouldn’t be able to earn a good living any longer if the Proposition passed and would flood into Family Law. The fact that Attorneys were complaining about the law being bad for their business told me it was a good law.
The Plaintiffs’ Bar bombarded the air waves with misleading advertising that the No-Fault Insurance Proposition would allow drunk drivers to get away with negligence caused accidents. The Proposition actually had a negligence clause in it the negated No-Fault if you are drunk or street racing, etc. This good No-Fault Proposition failed.
The Plaintiffs’ Bar are very generous donors to the Demonrat Party, so California’s Demonrat possessed government returns the favor by keeping laws in place that pays one of their biggest donors back.
Currently, it is very common in LA for uninsured illegals to cause an accident, and if their car is still drivable simply drive off.
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Yikes. That’s terrible. No fault works well here. When we are in Florida, we see hundreds of billboards for injury claim lawyers. My resident friend said that car insurance is very expensive there. They must have a system more like California.
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Florida is number 1 in the country for percentage uninsured motorists.
Those who do not pay into the insurance risk pool, yet potentially take out of it, drive up the rates for responsible people.
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