My friend, Jeff, texted me last week asking for an insurance agent reference. He just got his homeowners insurance premium estimate for the coming year and it was up a whopping +29% higher than what he paid last year – which was +23% higher than two years ago!
I haven’t gotten my new home insurance estimate yet, but we are definitely going to competitively shop our house & car coverages around. Nationally, Money Magazine reports home insurance rates are up +9% (to $1.8K/year) as the industry has been hit with construction inflation and some expensive weather disasters.
Link: 2023 Home Insurance By State (Money)
Our house got hit with a big hail storm last year and State Farm paid out $65K to get it reroofed. Another friend in the neighborhood next to ours has gotten two new roofs in two years and is waiting on a whopping $110K window replacement claim to be settled. Given what we’ve been paying (my annual premium is about $3.7K), I’m not sure how they aren’t going bankrupt.
Link: Have You Ever Paid For A New Roof?
I tried to call my agent to see how much our rates might be going up for the coming year, but couldn’t reach him on Friday. I’m guessing we’ll get an estimate in the mail soon.
Have you recently received an estimate for your home insurance for the coming year? Did it go up a lot?
Image: (c) MrFireStation.com
MrFireStation 
My neighbor called me last week and his Farmers’ Insurance renewal was doubled from the previous year. And to make matters worse, he wasn’t getting his fire insurance from Farmers. His fire insurance was from the CA FAIR plan which is the insurer of last resort for those who have brush nearby and live in what is considered a wildfire area. We compared premiums for around the same value house and the sum of his homeowner’s and FAIR Plan was around 4X my cost.
Remember State Farm sent a fire assessor out to my property last year and the result was they required me remove the ivy from the front of my house that had been there around 25 years for fire safety reasons. The neighborhood I live in gets inspected once a year as well for adequate brush clearance and fire safety by the local fire station. If you don’t keep your property cleared, they will do it for you at a rate that is much higher than hiring a private gardener to do it. The fire department inspector told me he didn’t consider my ivy a fire danger. I went back to State Farm armed with this and the underwriter came back with the new reasons that the ivy would cause rat infestations, which you think I would have had by now and stucco damage.
After pulling the ivy down to save my insurance there was no damage to the stucco. My favorite part was burning the ivy tendrils off with brush torch. I had some water infiltration into my house during last winter’s record rainfalls. I think the water infiltration was caused by the lack of ivy in my flower boxes and up the side of the house allowing the flower boxes to soak up rainfall that was being diverted. So I have added digging up the flower boxes and lining them with a pond liner and then adding a perforated drain pipe to channel the excess water out to my To Do List.
But, so far nothing from State Farm regarding a rate increase. My policy renews in September, so I should be finding out soon.
One thought about the roof hail damage. Sounds like your area of the country needs a change in roofing material. My house is roofed with flat lightweight concrete tiles which would probably hold up to hail and lasts 100 years if properly flashed. There must be an engineering solution to this problem.
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Holy Hell, California is crazy with insurance, huge risks, and requirements. They are one of the highest cost in that Money Magazine article.
We have ‘unlimited’ shingles on the house now. Our old ones were 40 year, these are a bit thicker and have more mineral coverage.
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The People’s Republic of California as fours seasons. We have mudslide, earthquake, fire and riot seasons.
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Don’t forget wildfires and droughts!
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Ours are up in line with national hikes. 43 years in our previous home, never a claim. That’s how they make money. Our RI home is in A1 velocity flood zone of Atlantic. Its rates run from egregious to unaffordable. Thank you, federal government, for nothing, because that’s what we got in return for Superstorm Sandy wreckage a decade ago. The only way to avoid is self-insure, which means you don’t carry a bank mortgage.
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I’d be happy with national average inflation right now. We should know in the next month. Our neighbor is retiring from State Farm, so I’ve been joking that the rate increase is from his fat pension!
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My renewal in March was flat year over year but we are in a fifth floor condo so our dwelling coverage is only unit improvements.
I spent my career as a risk manager and do so consulting in retirement.
Rates for homeowners coverage nationwide are up as you say 9% give or take. The big premium increases are due more so due to increase in cost of construction and TIV which is Total Insurable Value.
High hazard zones which include wildfire, hail and wind exposures is where property insurance costs go wild.
If you live in a flood zone and buy coverage, the federal government has subsidized your cost of coverage via the Flood Plan for decades. This is an area in which the federal government is finally correcting as floods have decimated the program due to lack of premium for the risk. The plan has historically paid for beach houses to be rebuilt many times. Taxpayers subsidize the building of property in flood zones where construction should not occur.
Just this week the King Tides in Seal Beach had local government managing floodwaters around multi million dollar properties, that makes no sense
I sympathize with those living in flood zones who formerly had reasonable premiums, but I’m not certain why I should provide a subsidy.
Actually some locations along the Mississippi were bought up by the government rather than allow for rebuilding in areas that will flood again. One or two claims and done.
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I don’t understand why that federal flood insurance doesn’t get more visibility. Subsidies for wealthy people to live on the beach and not cover the cost of their own risks. Bizarre.
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Corporate welfare and welfare for the wealthy are not visible on purpose. I remember a news broadcaster, I think it was Sam Donaldson received a huge tax subsidy for his Alpaca Farm.
If you really want to see corporate subsidies look at what farmers in California pay for water
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The reason flood insurance doesn’t get visibility is because news reports only report on the poor sole who lost their home. They don’t report on the poor taxpayer who who is getting stuck with the real bill.
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I typically last 2 years before I jump to a new agent. If the rate increase is 10% or less in that first year I leave it alone.
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Sound advice – I suppose you have to expect to get a deal in year 1. If it doesn’t rise to much in year 2, you made the right choice.
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Here is the latest on insurance. I actually tried shopping for insurance once and one of the agents for another insurer I contacted told me, “Make sure you send your agent a Christmas Card. You have a great deal and I cannot touch it.”
https://www.yahoo.com/news/insurance-giant-halts-sale-home-151840180.html
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I understand that State Farm doesn’t sell in Florida, either. It looks like they were careful not to offend the State of CA in that announcement, should they want to come back in.
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After the Northridge Earthquake, insurers went out of the earthquake insurance business. You now get your earthquake insurance from a State Agency, yet the insurance is marketed by State Farm.
My fire insurance is still with State Farm directly versus through the State fire insurance agency, and I have to pass some very stringent inspections by the insurance companies and the fire department.
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