Millions of Americans are watching with concern as their homeowner’s insurance premiums rise and their coverage shrinks.
Nationwide, premiums rose by more than 30% between 2017 and 2023, and are expected to rise nationwide in 2024.
Worse yet, if you lose your home in an accident and file a claim, your rates could go up by as much as 25 per cent.
Why this is happening
There are a variety of reasons, but there are commonalities.
Climate change due to global warming is causing some things to happen that we can’t control, and insurers are responding to the increase in claims.
Extreme natural disasters hitting densely populated areas are occurring more frequently than ever before, rising construction difficulties are driving up costs, and homeowners are maximising their losses.
Many parts of the United States are experiencing larger hailstorms, more massive storm surges, wildfires fuelled by devastating winds, and heat waves that melt asphalt.
What used to be a once-in-a-century natural disaster has become a yearly occurrence, warned risk assessors at the First Street Foundation.
In addition, many people are moving to risk areas.
Increasing coverage costs, higher insurance premiums
It’s been said that to get people to care about climate change, you have to put a price on it. Rising insurance premiums are doing just that.
As global temperatures rise rapidly, there will be more extreme heat waves, which means insurers will have to pay out more claims.
To deal with this, insurers are forced to raise premiums and change coverage, which leads to higher premiums for homeowners and everyone else.