Countries Where Home Insurance Rates Are Rising Fastest

Americans are still feeling the pinch of rising prices. According to the Consumer Price Index, the inflation rate has increased by 8.3% over the past 12 months. But some costs are increasing at a faster pace.

Take homeowners insurance premiums. The cost of insuring your home is up 12.1% year over year, according to Policygenius. And depending on where you live, things could be worse: Homeowners in three states have seen their insurance premiums rise at more than twice the pace of inflation.

In addition, the higher costs of building materials mean that things can be more expensive than expected if you actually have to use your insurance.

“It’s a two-way effect,” says Pat Howard, managing editor and licensed expert in property and casualty insurance. The genius of politics. “Not only do premiums get more expensive, but as replacement costs go up, you could end up becoming underinsured as a result.”

Here are the 10 states where home insurance premiums have seen the largest year-over-year increase, According to Policygenius.

Arkansas: 18.5%
Washington: 18.1%
Colorado: 17.5%
Texas: 16.0%
Oregon: 15.4%
Arizona: 14.8%
Utah: 14.1%
Minnesota: 13.9%
North Carolina: 13.7%
Illinois: 13.6%

The increase in Arkansas pace setting amounts to a $228 increase to the average annual premium as of 2021, bringing the average annual cost of a policy up to $1,235.

The largest increase in terms of amount in raw dollars belongs to Oklahoma, which is quickly charging $257 more per household than they did in 2021. The smallest increase belongs to New York, whose residents saw a rise of $57.

Re-shop your policy to protect yourself from inflation

Sky-high inflation is one of the main culprits behind premium increases. Home insurance coverage depends on the cost of rebuilding your home, and this may have gone up significantly as the price of many building materials has gone up and supply chain issues have made the building process more expensive.

“Diesel fuel, copper, brass, lumber — all of these things have an impact on the cost of home replacement,” says Loretta Worters, a spokeswoman for the Insurance Information Institute. “Plus, you don’t have enough contractors. And if the offer is less, that means they are charging more.”

The other big factor in increasing your premiums: the increasingly common natural disasters. Damage from hurricanes, hurricanes, storms, wildfires, and other natural disasters to date amounts to more than $88 billion annually in the 1920s, According to the Insurance Information Institute. This is a marked increase from $52 billion in average annual losses in the 2010s and $37 billion in the 2000s.

If you own a home, especially in an area prone to natural disasters, what can you do? First, check to make sure you are adequately covered. Your insurance payments should cover the cost of rebuilding your home, not its current market value.

“Your home may be worth a million dollars, but replacing it can cost a lot more,” Wurters says.

Even if you think you’re properly insured, Howard says, it’s worth visiting regularly.

“Let’s say your home is insured for $250,000,” he says. “You renewed your policy three months ago and made sure that’s the rebuilding value.” “But the wood has increased by 15% in those three months. Now your house costs $300,000 to rebuild, and if it’s destroyed, you’ll have $50,000 out of your pocket.”

If, after talking with your insurance agent, you decide that you have enough coverage, start exploring ways you can lower your premium. Your current agent may be able to help on this front, Howard says.

“They will probably look at the discounts you are eligible for, which will vary from state to state,” he says. “Maybe you have a home security system, a smart home, or a water leak monitoring device. One of them could be a 10% discount.”

Furthermore, you can shop with different insurance companies to see if the new company is willing to offer you a cheaper premium. “Now more than ever, we recommend reaching out and exploring all of your options to see if you can get a lower price,” Howard says.