Seniors are more susceptible to overpaying for home insurance

While they don’t have the highest average premiums, senior homeowners are the most susceptible demographic to overpaying for home insurance, according to premium trend research by Matic Insurance Services, Inc., which also found consumers with low credit scores are being disproportionately impacted by growing home insurance rates.

Policyholders in the 43-55 age bracket saw the highest average home insurance premiums. However, the average premium for seniors does not drop proportionately. A failure to regularly check home insurance policies and accept annual premium increases, which can add up over time, result in seniors overpaying, Matic reported.

By monitoring, reviewing and adjusting their insurance policies, seniors save an average of $751, according to the digital insurance agency.

“Many factors contribute to finding extensive savings. Home improvements and bundling auto might play a role, but the most common occurrence is from a customer that has lived in the same house for over 20 years,” Ben Madick, co-founder and CEO of Matic Insurance, said in a release. “Even without claims, a homeowner will likely experience a 3-4% increase in premiums each year. Over time that increase is not insignificant.”

Industry studies show that across demographics, 40% of homeowners haven’t reviewed their policies during the past two years.

Matic’s research, which included data from 36 property & casualty insurance carriers, also found policyholders with FICO scores below 580 saw the largest increase in home insurance rates, growing 6.4%. Nationally, home insurance premiums increased 4% year-on-year during the period stretching from June 1-May 31. Looking at Coverage A, or dwelling coverage, the national average increased 6.3% during the period, while those with FICO scores below 580 saw 9% increases.

“The housing market, the cost of materials, and the cost of labor were on the rise even before COVID-19. We’re now seeing those increases reflected in the estimated replacement cost of the home (Coverage A), which ultimately drive increases in insurance premiums, among other factors,” Madick said. “While homeowners with lower FICO scores experienced a disproportionate increase, they are receiving better coverage, and the gap between premiums and Coverage A is closing.”

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