Managing Increased Home Insurance Costs
Managing Increased Home Insurance Costs
Homeowners across the United States are grappling with escalating insurance premiums that are having a significant impact on housing affordability and influencing real estate transactions. This article examines the factors driving these increases and offers strategies for homeowners to mitigate rising insurance costs.
Escalating insurance premiums
In recent years, the cost of homeowners insurance has skyrocketed across the country. According to the National Association of Insurance Commissioners and Policygenius, the average annual premium will increase from $1,272 in 2019 to $1,905 in 2023 – a 50% increase. Several factors are contributing to this trend, including the increased frequency of natural disasters, inflation in construction costs, and insurers reassessing risk in different regions.
Natural catastrophes and rising losses
Natural catastrophes have become more frequent and severe, resulting in significant insured losses. For example, insured losses from natural catastrophes are projected to reach nearly $125 billion in 2022, exceeding the 10-year average of $81 billion. This surge in losses has prompted insurers to raise premiums to offset their increased liabilities.
Inflation and reassessed risks
Inflation in building materials and labor has also played a role. The cost of rebuilding or repairing homes has escalated, forcing insurers to adjust premiums accordingly. In addition, insurers are reassessing the risks associated with certain areas, particularly those prone to natural disasters, resulting in higher premiums or, in some cases, the withdrawal of coverage options.
Impact on homeowners
The impact on homeowners is multifaceted. Increased insurance costs increase the overall cost of homeownership, potentially pricing out prospective buyers and putting financial strain on existing homeowners. In high-risk states like Florida, some residents have seen rate increases as high as 400%, and an increasing number are receiving cancellation notices from insurers. These rising costs can also affect real estate transactions, as buyers may reconsider purchasing in areas with exorbitant insurance rates, and sellers may find it difficult to attract buyers.
Strategies to mitigate rising costs
Homeowners have several options to address the burden of rising insurance premiums. Increasing deductibles is one of the easiest ways to reduce premium costs. For example, increasing a deductible from $500 to $1,000 can reduce premiums by about 25%. Installing home safety measures, such as security systems, smoke detectors and fire alarms, can make a property less risky to insure and may qualify homeowners for discounts. Bundling homeowners insurance with auto insurance from the same provider can also result in savings of up to 30%. Maintaining good credit is another key strategy, as insurers often use credit-based insurance scores to determine premiums. Finally, homeowners should regularly compare quotes from different providers to ensure they are getting the best possible rate.
In summary, rising homeowners insurance premiums pose a significant challenge to affordability and the real estate market. By understanding the factors driving these increases and taking proactive measures, homeowners can better manage their insurance costs and make informed decisions about their properties.
Jack C Bharat
AmeriGroup Residential & Commercial Properties. Inc.
122-15 111th Avenue, S Ozone Park, NY 11420
Email: jackcbharat@gmail.com
Phone: (718) 805-6982
Jack C Bharat has been in the Real Estate Business since 2003. As a Realtor & Developer, his experience in buying dated, distress or fixer upper and renovated them back for resale can help both buyers and sellers in their transactions. Graduated in 1999 from Queens College (CUNY) Flushing, with a Bachelors of Arts Degree and in 2012 from LaGuardia College with Goldman Sachs 10K Small Business Certificate Of Entrepreneurship, Mr Bharat is always educating himself to stay current and sometimes ahead of Real Estate Market Trends. He is currently a Notary Public in the State of NY as well.
Mr Bharat has completed real estate projects in New York-Queens & Long Island, Florida-Ocala & Coral Springs & recently (Nov 2023) 8 Units Apt in Providence, Guyana. His passion for creating projects that blend functional modern architectural design in harmony with the natural environment are evident in his most recent commercial project in Providence Guyana, currently under initial phase of construction. Mr Bharat also is the CEO of Liberty Office Supplies & Equipment, Inc. A Certified Minority Business Enterprise (MBE) with New York City & New York State. Established in May 1999, Liberty provides a wide range of office supplies and work as a sourcing company for the Federal Government by being a GSA schedule holder.
Jack is Licensed as a Real Estate Broker in State of New York and in the State of Florida. He has knowledge in both residential and commercial sales. His motto “Working with Clients to achieve their real estate goals” is what drive him to be on top of his game. He is very involved in his community especially with social and educational issues. He is the proud sponsor of a local Cricket Team, Boxing and donates his time and money to various organizations that work with children, abuse victims and the elderly. He is cited by NYC Mayor’s Office, NYS Assembly and NYC Council for his leadership role in his community.
Mr Bharat has three daughters: Alicia who graduated with her Masters Of Science in Education from Queens College and is now a STEM Teacher with the NYC Dept of Education, Kayla who has recently (2024) graduated from CUNY School for Public Health with her Masters of Public Health in Environmental & Occupational Health Sciences & works as an Environmetal Health & Safety Specialist with Sloan Kettering Cancer Ctr. and Jessica who is currently enrolled as a senior at Queens College pursing her goal as a Dentist.
Mr Bharat has completed real estate projects in New York-Queens & Long Island, Florida-Ocala & Coral Springs & recently (Nov 2023) 8 Units Apt in Providence, Guyana. His passion for creating projects that blend functional modern architectural design in harmony with the natural environment are evident in his most recent commercial project in Providence Guyana, currently under initial phase of construction. Mr Bharat also is the CEO of Liberty Office Supplies & Equipment, Inc. A Certified Minority Business Enterprise (MBE) with New York City & New York State. Established in May 1999, Liberty provides a wide range of office supplies and work as a sourcing company for the Federal Government by being a GSA schedule holder.
Jack is Licensed as a Real Estate Broker in State of New York and in the State of Florida. He has knowledge in both residential and commercial sales. His motto “Working with Clients to achieve their real estate goals” is what drive him to be on top of his game. He is very involved in his community especially with social and educational issues. He is the proud sponsor of a local Cricket Team, Boxing and donates his time and money to various organizations that work with children, abuse victims and the elderly. He is cited by NYC Mayor’s Office, NYS Assembly and NYC Council for his leadership role in his community.
Mr Bharat has three daughters: Alicia who graduated with her Masters Of Science in Education from Queens College and is now a STEM Teacher with the NYC Dept of Education, Kayla who has recently (2024) graduated from CUNY School for Public Health with her Masters of Public Health in Environmental & Occupational Health Sciences & works as an Environmetal Health & Safety Specialist with Sloan Kettering Cancer Ctr. and Jessica who is currently enrolled as a senior at Queens College pursing her goal as a Dentist.
