Will Homeowners Insurance Go Down in 2023?

COSTA MESA, Calif. - Dec. 14, 2022 - PRLog -- The home insurance industry is worth $800 billion, so you would think there is a surplus, especially for the big carriers, to pay out claims. If you've seen a hike in home insurance premiums in the recent past, without once filing a claim, you may be peeved. However, you must brace yourself because rates may continue rising until we grasp control over inflation and severe weather, the two main factors that have contributed to rising home insurance costs across the country. We are also still suffering from COVID related supply line disruptions, which have increased replacement cost of repairs, which are increasing at double the rate of U.S inflation, according to the Insurance Information Institute (III).

In 2021, the average home insurance rate increased by 9% and 7% in 2020. In 2022, some states increased insurance rates by up to 30%. Idaho topped the list with an increase of 34%! States hit by natural disasters saw an increase in wind and hail deductibles, up to 18% according to a LexisNexis Risk Solutions Report.

Americans paid, on average, $1,213.89 for homeowners insurance in 2022 but the average per state was wide-ranging. In 2023, we will all likely see prices climb, especially in states where rates have until now remained flat.

Keep reading to see why you should expect a hike and how you can save money despite rising prices.

Inflation and Homeowners Insurance

Homeowners should expect more of the similar rate hikes in 2023 that they saw in 2022, especially in states that have yet to raise prices. The Consumer Price Index increased by 7.7% over the 12-month period that ended in October 2022. Earlier in the year, the index grew 9.1% by summer. That jump was the largest increase in 40 years, which is bad news for the economy.

The prices for materials necessary to rebuild or repair a home have risen due to inflation. Therefore, everyone's home insurance rates increased, even if they did not file a claim. If you have filed a homeowners insurance claim, expect a relatively steep increase or incremental increases over the course of 2023.

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