Just 9% of home policyholders adjusted coverage to account for inflation
Only 44% of homeowners reviewed their property insurance policy during the past 12 months, Policygenius reports.
Most homeowners (56%) haven’t reviewed their property insurance policy during the past 12 months and just 9% have adjusted their limits to account for growing construction costs and inflation, according to Policygenius.
Further, the online insurance marketplace reported just 33% of homeowners are “very sure” their policy limit is high enough to cover the full replacement of their home.
“Construction costs on single-family homes were up nearly 17% in 2022, yet our survey found that just 14% of homeowners increased their insurance limits or added coverage features to account for this,” Pat Howard, licensed property and casualty insurance expert at Policygenius, said in a release. “Most people are aware of how prices have skyrocketed over the last two years, but one of the most overlooked impacts of inflation is how it has caused homes to be underinsured, which happens when a home’s insurance coverage isn’t high enough to pay for a full rebuild after a disaster.”
The 44% of homeowners that did review their policy in the past 12 months were more likely to increase their coverage limit, take action to lower rates and have a least one coverage feature to account for higher rebuild costs, according to Policygenius.
Younger policyholders, aged 18-34 years, were more likely to have taken action during the past year on their home insurance. For example, 31% of that cohort said they switched insurance carriers, compared with 13% of people 35-54 years old and 7% of those 55 or older.
Further, Policygenius found that more than 2 in 3 homeowners might not have guaranteed replacement cost coverage, while 80% could be without extended replacement cost coverage. The online insurance marketplace noted both are important add-ons that can limit exposure to demand surge and higher rebuilding costs after a disaster.
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