A Comprehensive Guide to Understanding Your Home Insurance Rates in 2023

As a homeowner, you might have noticed a significant increase in your insurance premiums last year. This sudden hike may have left you wondering: Why did my homeowners insurance go up? What factors contributed to this increase? Can I expect the same trend in 2023 and beyond?

At Mints Insurance Agency, we understand your concerns and are here to demystify the intricacies of homeowners insurance rates for you. In this guide, we’ll delve into the reasons behind the 2022 rate surge, provide an outlook for 2023, and offer tips on how to lower your premiums.

A Year of Soaring Home Insurance Rates

Homeowners across the country felt the sting of rising insurance rates in 2022. Per our research, premiums saw an average hike of 12.1%, translating to an average increase of $134 per policy.

Many factors contributed to this uptick including inflation and labor shortages in the construction industry. High-risk states, namely those prone to natural disasters, were hit the hardest. Moreover, homeowners in these regions had to seek coverage from Excess and Surplus (E&S) insurers who could charge higher premiums due to their independence from traditional insurance markets.

5 Reasons Your Home Insurance Rates Increased

You’re probably seeking answers if your policy renewal has a higher price tag. Here are five common reasons that could explain the hike in your homeowners insurance rates.

1. Inflation Continues into 2023

One of the main culprits behind the rate surge is the ongoing inflation that began in 2020. The increased cost of labor and construction materials resulting from supply chain disruptions has increased home insurance premiums.

2. Climate Change: Escalating Natural Disasters

The frequency and intensity of natural disasters fueled by climate change have caused significant financial losses for insurance companies leading to increased rates. For instance, in 2022 alone, eighteen expensive natural disasters resulted in losses exceeding $165 billion.

3. Aging Homes Needing Upgrades

If your home is older and requires upgrades, your insurance rates may increase. Regular claims for water damage due to burst pipes or leaks can increase your premium.

4. Declining Insurance Scores

Your insurance score, a combination of your credit score and claims history, also impacts your premiums. If your credit score has declined or you’ve recently filed a claim, you might see your rates increase.

5. Attractive Nuisances

The presence of “attractive nuisances” like pools, trampolines, or pets can lead to higher premiums. These features increase the potential for injury claims, prompting insurance companies to charge more.

What to Do If Your Home Insurance Rates Go Up

If your insurance rates have increased, don’t panic. Contact your agent at Mints Insurance Agency, and inquire about the changes. They can provide explanations and suggest ways to lower your rates, such as increasing your deductible or checking for eligible discounts.

Three Strategies to Lower Your Home Insurance Rates

There are several strategies you can employ to lower your insurance premiums.

1. Inquire About Discounts

You may be eligible for discounts that you haven’t taken advantage of yet. A few popular discounts include multi-policy discount, claim-free discount, protective devices discounts, first-time homebuyer discount, senior citizens discount, and loyalty discount.

2. Increase Your Deductible

Raising your policy deductible can generally lower your insurance premiums. Consider this option if you can afford a higher out-of-pocket cost in the event of a claim.

3. Shop Around

Consider exploring other insurance providers. At Mints Insurance Agency, we provide this service for all of our clients. If you’d like to help you, give us a call at (856) 825-2880.

Frequently Asked Questions

Why did my homeowners insurance go up in 2022?

Several factors contributed to the rate increase in 2022, including rising labor and construction costs, supply chain disruptions, and climate change.

Why are my home insurance rates going up in 2023?

The upward trend continued in 2023 due to the same factors that affected rates in 2022. Additionally, insurance companies had to recover from billions of dollars in losses due to worsening climate disasters.