This article from Wall Street Journal is written by Leslie Scism and J. J. McCorvey
The cost of insuring a home is on the rise, forcing Americans to make tough decisions about whether to cut back on coverage or make big changes to save their wallets.
The nationwide average annual premium for homeowners insurance is $1,398 today, as estimated by trade group Insurance Information Institute. The group says that from 2017 to 2020, premium rates were up 11.4% on average. That is higher than the nation’s 7.9% inflation rate during those years.
Premiums have further increased this year with an average rate increase in the third quarter of 6.6%, up from 4.8% in the second quarter, according to MarketScout, a firm that monitors insurance rates. The cost was up as much as 25% in parts of California and Florida, MarketScout says, and $20-million-plus homes with high wildfire exposure faced even higher increases.
The increase in home-insurance premiums is largely driven by many of the same factors that are putting other parts of Americans’ budgets under stress. Higher prices of building materials and other supply-chain disruptions, for example, have driven up repair and rebuilding costs for insurers.
