Why Homeowners Insurance Premiums Are Still Rising
At LBP Insurance, we feel the frustration of rising homeowners insurance premiums, and we want to assure you that we are here to help. We understand the burden of rising costs, and we’re committed to being transparent with you about what’s driving these increases. In this final installment of our 3-part series, we’ll explore why homeowners are seeing higher premiums, from the soaring costs of construction materials to the increased frequency of natural disasters. We also want to offer a piece of advice: switching carriers for a small premium difference isn’t always the right choice. Policies can differ widely, and by jumping to a new provider for a lower rate, you may be missing out on benefits like deductible rewards or higher coverage options. We’re here to guide you in the right direction, ensuring you have the coverage you need at the best value.
Check out Part 1 on Rising Commercial Insurance Premiums and Part 2 on Rising Auto Insurance Premiums
Why Are Homeowners Insurance Premiums Rising?
Homeowners insurance has been steadily increasing over the past few years. Here's why:
1. Rising Construction and Material Costs
One of the biggest reasons homeowners are seeing rate hikes is the cost of rebuilding and repairing homes. Prices for building materials, such as lumber, concrete, and steel, remain much higher than pre-2020 prices. Construction costs have increased by 37% over the past few years . This inflation directly affects your homeowners insurance premiums because insurers must account for higher rebuilding costs if your home is damaged.
2. Increased Risk of Natural Disasters
The frequency and severity of natural disasters have increased in recent years. Wildfires, hurricanes, and floods are causing billions of dollars in damage, and homeowners insurance companies must raise rates to cover these risks. In fact, natural disasters are becoming more common and more intense, driving up the need for higher insurance coverage .
3. Labor Shortages
The skilled labor shortage in construction is also impacting home insurance rates. Fewer workers are available to repair homes after a disaster, which makes repairs take longer and cost more. This drives up claims costs, leading insurers to raise premiums .
4. Increased Liability and Claim Frequency
More frequent claims, especially in areas impacted by severe weather, also lead to higher rates. As the cost of liability claims and property damage increases, homeowners insurance premiums adjust accordingly to help insurers cover potential losses .
What Can You Do?
To offset rising premiums, consider raising your deductible or reducing unnecessary coverage. Additionally, bundling your policies and working with an independent agent like LBP Insurance can help you find the best rates without sacrificing coverage.
Conclusion: Navigating Rising Insurance Costs
While inflation may be easing, the insurance industry is still adjusting to the lasting effects of higher claims costs, construction price hikes, and more frequent natural disasters. Whether you're a homeowner, driver, or business owner, rising premiums are an unfortunate reality for most. However, by staying informed and reviewing your coverage regularly, you can manage costs effectively and make sure you're properly protected.
At LBP Insurance, we understand how rising insurance costs can impact your bottom line. That's why we’re here to help you navigate these challenges, compare options, and find affordable, reliable coverage for your home, auto, and business needs.
Contact us today to schedule a policy review and find out how we can help you stay protected in today’s ever-changing insurance landscape.