Insurance Premiums Are Rising Fast. Here’s How to Find Cheaper Insurance

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Homeowners insurance is getting more expensive. But read on for a few ways to lower costs. 

If it feels as if your homeowners insurance premiums are a lot more expensive than they were a few years ago, it’s not just you. Homeowners insurance cost is up 8.8% on average over the past year and a staggering 30.7% since 2018, according to S&P Global.

Inflation may be the first thing we all blame when it comes to rising costs, and it’s definitely a factor in rising insurance premiums, but many companies are raising prices for another reason, too.

Namely, more extreme weather is making insurance expensive.

Why homeowners insurance is so expensive

The latest data from the Insurance Information Institute shows that in the first nine months of 2023, companies experienced insured losses of more than $50 billion — the costliest year ever.

The expenses came mainly from severe weather events and storms that caused flooding, hail, tornadoes, and lightning- and wind-related damage.

Inflation exacerbates the problem of insurance losses, driving up the cost of materials and labor and adding to the overall cost of repairing or replacing damaged property.

And some homeowners insurance companies paid out so much from property damage recently that they’ve stopped offering coverage in certain parts of the country and left some states altogether.

The problem for you and me is that all the costs insurance companies are taking on are eventually passed on to the consumer. The National Association of Mutual Insurance Companies says that reinsurance prices were up 30% to 50% last year.

Here are a few tips for finding cheaper insurance

With homeowners insurance prices rising quickly, you may pay far more for your premiums than expected. The good news is that there are a few things you can do to improve your situation.

1. Switch insurance companies

Not all companies write policies in the same way, and not all offer the same coverage for the same price. If you last shopped around for homeowners insurance a while ago, now may be the time to do it. It’s simpler than ever to do this online, and you might be able to find better or cheaper coverage in just a few minutes.

2. Reduce coverage or increase your deductible

This may not be the right move for everyone, but if you’ve shopped for insurance and can’t find a better deal, you may save money by reducing your coverage. You’ll need to look at your current policy to see if there’s anything you’re paying for that you don’t need. If you can’t cut back on coverage, consider raising your deductible to reduce your premiums.

3. Bundle your homeowners insurance

One simple way to potentially lower your homeowners insurance is to bundle it with your other insurance policies, like auto. State Farm says the average savings for bundling home and auto insurance policies is $1,073 annually, a savings of more than $89 per month.

4. Improve your home

Finally, making certain improvements to your home can sometimes lower your insurance premiums. The Consumer Financial Protection Bureau says improving your home, like installing a fire alarm and security system or updating your roof, plumbing, and electrical, could also reduce your insurance costs.

You can’t control why homeowners insurance costs have risen over the past few years, but you can shop around for a better rate, adjust your coverage, or bundle insurance to help reduce costs. No matter which avenue you choose, it may be a good idea to contact your insurance agent to see if there’s a way to reduce your monthly premium.

Our picks for best homeowners insurance companies

There are many homeowners insurance companies to choose from. We’ve researched dozens of options and short-listed our favorites here. Looking for a green build discount or easy bundle policies? Want an easy-to-use interface? Read our free expert review and get a quote today.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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