Rates for home insurance show Q1 2022 increase
The first quarter growth is a sign of things to come, as MarketScout projects further increases.
Homes valued under $1 million saw an average insurance rate increase of 5.3% in the first quarter of 2022, while houses valued at more than $1 million saw a 7% increase during the period, according to MarketScout.
Both home insurance rate increases reflect higher rates than the previous quarter, which saw rates for homes valued under $1 million increase of 3.7% and 6.3% for homes valued at more than $1 million.
“We expect homeowners rates across the U.S. to continue to increase,” Richard Kerr, CEO of MarketScout, said in a release. “What used to be considered relatively benign catastrophe-prone areas of the U.S. are now experiencing more and more claims.”
The market is being influenced by several major insurers “dramatically” cutting back their appetite for tough to place home policies. This is expected to affect the availability of coverage and significantly increase, according to Kerr.
It could also drive coverage restrictions for policyholders “whose insurer will issue a notice of non-renewal,” Kerr said, continuing: “MGAs and brokers are scrambling for capacity. The exit by these insurers will accelerate the formation of new capacity providers and insurers. In the meantime, rates are going to increase considerably for the tough to place homes; perhaps as much as 35%.”
Further, rates for personal articles insurance reached 4% during 2022’s first quarter, compared with 3% during the previous period.
Personal auto rates were also up during the most recently closed quarter, increasing 4.3% compared with a small increase seen during the final quarter of 2021.
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