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The Hard Insurance Market: Why Personal Insurance Rates Continue to Rise

December 8, 2021
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Personal insurance is the kind of insurance we think of that covers our day-to-day: It covers individuals against loss that results from death, injury, or loss of property. These insurance lines generally protect people and their families from losses they couldn’t afford to cover on their own and allow us to drive a car or own a home without fear of financial ruin if something happens.

If you’ve shopped for personal insurance recently, you may have noticed that rates are going up—dramatically. A report from MarketScout shows that the composite rate for personal insurance increased 6.3 percent in the fourth quarter of 2020. Most impacted, the report says, are high net worth homeowners with property values over a million dollars. Those rates went up an average of 8.2 percent.

Why are these rates increasing? You only have to watch the news to understand why, according to the article on propertycasualty360.com: The increased frequency and strength of natural disasters. “According to the National Oceanic and Atmospheric Administration (NOAA), 2020 was a record-setting year in that 22 large $1 billion weather and climate events hit the U.S.,” the article points out. “It also was the sixth consecutive year that 10 or more billion-dollar weather disasters had affected the region.”

Another reason rates are skyrocketing—the cost of repairing homes. The article points out that in 2008, the cost of replacing a 3,000 square foot roof was around $2,100. Today, that cost is $4,600, a 77 percent increase. Add to that higher lumber costs and supply chain issues, and it’s just more expensive now to do repairs.

States that have seen more than their share of disasters recently, like California, Florida and Texas, pay the price in higher insurance rates. TheZebra.com says the average cost for home insurance in Texas is $2,207 per year or $184 per month. Compared to the national average, Texans pay 37 percent more for home insurance.

Insurance is something we all need, no matter what the cost. The best way to get your best value is to talk with a reputable agent on what you need for coverage, and what you can afford. You can’t afford not to.

View more from Erin Blevins in her article, “The Advantages of Group Buying Power and Personal Insurance – Why it Works.”

For homeowners insurance check out our blog, “What to Consider When Buying or Selling Your Home.”


For more information visit our Personal Risk page or contact:

Erin Blevins
Personal Risk Advisor
513.716.6001
Email

 

(Source: propertycasualty360.com, cms.marketscout.com, thezebra.com)

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