Median homeowners insurance premiums are set for another big increase in 2023, according to a new report.
Nationally, the average cost of homeowners insurance is expected to jump 9%, or by about $150, according to a recent report from the insurance website.
Homeowners in some states will see insurance premiums that are much higher than that. In Florida, the most expensive state for home insurance, homeowners can expect to pay nearly $8,000 on average in premiums in 2023 — a whopping 66% increase from last year.
Experts say inflation is partly to blame for the overall price hike, but climate change and rampant fraud are also behind large premium increases in certain areas, making the cost of home insurance in many states well above the national average.
What does the research say
According to Insurify, the Massachusetts insurance marketplace, the average annual premium for homeowners insurance is estimated to reach $1,784 in 2023, which is a 9% increase from 2022 when the average premium was $1,636. dollars.
- The projected increase in home insurance premiums in 2023 comes on top of a 7% increase in 2022. Average premiums are expected this year to be more than $250 more than in 2021, according to Insurify.
- “The same inflationary pressures that increase your purchase bill are now driving higher homeowner insurance rates,” Colin Finn, managing director of Boston-based insurance company Plymouth Rock, said in the report. “It costs more and takes longer to fix your home, which increases the average cost per claim and ultimately the cost of homeowners insurance for everyone.”
- Inflation aside, experts say more catastrophic weather and natural disasters due to climate change are driving up home insurance premiums as insurers face an influx of water and fire damage claims in particular. (Note: Home insurance does not usually cover flooding.)
- Some areas are more prone to severe weather, and the Federal Emergency Management Agency assigns “hazard ratings” based on the likelihood of natural disasters.
- On average, home insurance premiums for properties located in high-risk areas are $3,379, while home insurance premiums in low-risk areas are $1,387, Insurify estimates.
Regardless of whether your home is located in a high-risk area, home insurance premiums can be affected by natural disasters in other areas as insurers may operate across multiple states—hiking premiums in one area to offset the costs of another.
States with the highest home insurance premiums
While the average insurance premium nationwide is close to $1,800, many states have exceeded that amount. According to Insurify, the 10 most expensive states have average home insurance premiums above $4,000.
10. Nebraska: 4064 dollars
9. Texas: $4,067
8. Colorado: $4,177
7. South Dakota: 4343 dollars
6. Kentucky: 4370 dollars
5. Kansas: $5,005
4. Alabama: 5102 dollars
3. Louisiana: $5,353
2. Oklahoma: $6,853
1. Florida: 7788 USD
In Florida, average home insurance premiums are 437% higher than the estimated 2023 national average of $1,784. According to Insurify, the Florida average last year was $4,692. This year’s forecast represents a whopping 66% cost increase for homeowners in the Sunshine State.
In addition to reeling from tens of billions of dollars in damages from recent hurricanes, Florida is experiencing a home insurance crisis due to rampant “fraud and abuse of the legal system,” with the state accounting for 80% of home insurance claims in the country, according to the Non-Profit Insurance Information Institute. Profitable (III). III says several insurance companies have gone bankrupt in the past year, and dozens more have left Florida or stopped offering new policies in the state.
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