Average home insurance premiums are expected to rise sharply again in 2023, according to a new report.
Nationally, the average cost of home insurance is expected to jump 9%, or around $150, according to a recent report from online market Insurify.
Homeowners in some states will see their premiums soar much higher than that. In Florida, the most expensive state for home insurance, homeowners can expect to pay an average of nearly $8,000 in premiums in 2023, a whopping 66% increase from last year. .
Inflation is partly to blame for widespread price hikes, experts say, but climate change and rampant fraud are also driving steep premium increases in some areas, driving up the cost of insurance. home insurance in several states well above the national average.
What the research says
According to Insurify, a Massachusetts-based insurance marketplace, the average annual premium for home insurance is expected to reach $1,784 in 2023, marking a 9% increase from 2022, when the average premium was $1,636. .
- The expected rise in home insurance premiums in 2023 comes on top of a 7% increase in 2022. Average premiums this year are expected to be more than $250 higher than in 2021, according to Insurify.
- “The same inflationary pressures that drive up your grocery bill are now driving up your home insurance rates,” Colleen Finn, managing director of Boston-based insurer Plymouth Rock, said in the report. “Repairs to your home cost more and take longer, which increases the average cost per claim and ultimately the cost of home insurance for everyone.
- Inflation aside, experts say more catastrophic weather and natural disasters due to climate change are driving up home insurance premiums, with insurers notably facing an influx of claims for water and fire. (Note: home insurance usually does not cover flooding.)
- Some areas are more prone to severe weather, and FEMA assigns “hazard ratings” based on the likelihood of natural disasters.
- On average, home insurance premiums for properties in very high-risk areas are $3,379, while premiums for homes in low-risk areas are estimated at $1,387. from Insurify.
Whether your home is located in a high-risk area, your home insurance premiums may be affected by natural disasters in other areas, as insurers may operate in multiple states – raising premiums in one area to offset costs of another.
States with the highest home insurance premiums
While the nationwide average premium approaches $1,800, many states have exceeded that amount. According to Insurify, the 10 most expensive states have average home insurance premiums over $4,000.
10. Nebraska: $4,064
9.Texas: $4,067
8. Colorado: $4,177
7. South Dakota: $4,343
6.Kentucky: $4,370
5.Kansas: $5,005
4.Alabama: $5,102
3. Louisiana: $5,353
2.Oklahoma: $6,853
1. Florida: $7,788
In Florida, the average homeowners insurance premium is 437% higher than the estimated national average of $1,784 in 2023. According to Insurify, Florida’s average last year was $4,692. This year’s projection represents a massive 66% cost increase for Sunshine State homeowners.
In addition to suffering tens of billions of dollars in damage from recent hurricanes, Florida is grappling with a home insurance crisis caused by rampant ‘fraud and abuse of the legal system’, with the state accounting for 80% home insurance lawsuits nationwide, according to the nonprofit Insurance Information Institute (III). Several insurers went insolvent last year, III says, and dozens more left Florida or stopped offering new policies in the state.
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