2023 Home Insurance Rates Are Increasing, Take a Look!

15 May

Homeowner insurance rates have been climbing for more than five years, increasing a shocking 19.1 percent since 2018 according to ValuePenguin. This trend will continue in 2023. According to the latest ValuePenguin study, between Jan. 1 and March 17, 2023, homeowner insurance premiums have increased 2.8% across the country.

“In 2023, the rising cost of labor and materials for rebuilding, rising home values, an end to COVID-19 pandemic trends — like working from home — and a resurgence in property crime have all made a significant impact on U.S. homeowners insurance claims,” said Divya Sangameshwar, ValuePenguin home insurance expert, in a recent ValuePenguin article. 

According to S&P Global Market Intelligence, homeowners can expect to see their premiums increase by an average of 7.1% in 2023.

Rate increases vary by state with some states seeing dramatically higher increases than other states. According to the ValuePenguin data, these three states saw the biggest increase in the first part of 2023: 

  • New Mexico: 8.3%
  • Arizona: 8.2%
  • South Dakota: 7.3%

On the other end of the spectrum, one state actually saw a decrease (although tiny) while a number of states didn’t see any increase at all. Here are the top four states that experienced the smallest increase in 2023:

  • Minnesota: -0.4%
  • Wyoming: 0.0%
  • Colorado: 0.0%
  • Alaska: 0.0%

Here is rate increase percentage for all states:

  • New Mexico   8.3%
  • Arizona           8.2%
  • South Dakota 7.3%
  • North Carolina 5.9% – Click to Compare & Get NC Home Insurance Quotes Now!
  • North Dakota 5.6%
  • Nebraska        5.0%
  • Illinois 4.9%
  • Utah    4.8%
  • New York       4.4%
  • Kentucky        4.3%
  • Rhode Island 4.2%
  • Idaho  4.1%
  • Kansas           4.1%
  • Louisiana        3.9%
  • Michigan         3.8%
  • Tennessee     3.7%
  • Virginia           3.6%
  • Alabama         3.5%
  • Georgia          3.3%
  • Maine  2.8%
  • California        2.7%
  • Connecticut    2.7%
  • Oklahoma       2.6%
  • Oregon           2.6%
  • Wisconsin       2.6%
  • Iowa    2.5%
  • Delaware        2.4%
  • Arkansas        2.3%
  • West Virginia 2.3%
  • Texas  2.2%
  • Indiana           2.1%
  • Missouri          2.1%
  • South Carolina           2.0%
  • Washington    2.0%
  • Hawaii 1.5%
  • Massachusetts          1.5%
  • Montana         1.4%
  • Nevada           1.3%
  • New Jersey    1.3%
  • Pennsylvania 1.3%
  • Maryland        1.1%
  • New Hampshire         1.1%
  • Ohio    1.1%
  • Mississippi     0.9%
  • District of Columbia   0.2%
  • Florida 0.2%
  • Vermont         0.1%
  • Alaska 0.0%
  • Colorado        0.0%
  • Wyoming        0.0%
  • Minnesota      -0.4%

While the rate increases are significant in some states, rate increases have not yet reached the rate increases in 2022 when homeowners saw an average increase by 4.9%.

There were a variety of factors that contributed to these increases in 2022 including the following:

  • Weather-related events with losses exceeding $1 billion 
  • Lumber prices were three times higher in 2022 than before the pandemic
  • Labor shortages slowed production and pushed up costs

Rates are up dramatically since 2018

ValuePenguin data shows that from 2018 to 2023, the average cost of homeowners insurance has shot up by a cumulative 19.1% across the country.

There are a number of factors that have contributed to these increases but the frequency in severe weather events has been a major factor.

“What most people assume is that homeowners’ insurance premiums are tied to the rising value of homes,” Sangameshwar said in the ValuePenguin article. “And while this is true — especially now — the one factor really impacting homeowners’ insurance premiums is the worsening frequency of extreme weather events.”

In addition to higher premiums, homeowners in some states have seen insurance companies stop writing coverage in certain areas and have even pulled out of some states entirely. This means that homeowners have fewer options and this leads to more expensive premiums. 

The largest and smallest rate increases between 2018 and 2023

Between 2018 and 2023 some states saw massive increases with Florida topping the list at 41.5%. Here are top three rate increases 2018 to 2023:

Between 2018 and 2022, Florida was hit by a number of very expensive storms, in total, Florida was impacted by 19-billion-dollar weather and climate disasters.

States with the lowest increase were:

  • Wyoming: 0.8%
  • Alaska: 1.1%
  • Vermont: 2.1%

Severe weather led to $98.9 billion in insured losses in 2022

Across America, there were 119 natural catastrophes in 2022 which resulted in $98.9 billion in insured losses. The catastrophes broke down as follows: 

  • Tropical cyclones: $53.2 billion
  • Severe convective storms: $29.3 billion
  • Wildfires, droughts and heat waves: $8.9 billion
  • Winter storms: $4.1 billion
  • Flooding: $3.3 billion

When it comes to homeowners insurance, where you live will have a major impact on the cost of your homeowners insurance as well as the types of coverage you may need to carry. As an example, if flooding or earthquakes are common in your area you may need to carry flood or earthquake insurance to fully protect your home.

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