Inflation, weather events of increasing severity, growing material costs and supply chain issues are working in unison to push up home insurance premiums in the U.S., according to Insurify, which projects rates to see an average increase of 9% this year. This comes on top of 7% increases in 2022. Growing costs for construction materials and labor could be driving commercial properties to be undervalued by as much as 30% for underwriting purposes, according to Tüv Süd Global Risk Consultants Corp. Since the pandemic, construction inflation has been average 12%-40%. "As material and labor costs rise, the cost to repair and replace damaged homes and vehicles increases. If premium rates didn't reflect these increased costs, insurers would quickly exhaust the funds they set aside — 'policyholder surplus'— to ensure that they can afford to keep their promises to pay all claims," the Insurance Information Institute (Triple-I) noted in a brief. According to Triple-I, the trends driving up home insurance rates are unlikely to subside in the years to come. Even if general inflation cools, labor and replacement costs are still expected to grow. The above slideshow includes details on the top homeowners (multiple peril) insurance companies, according to data from the National Association of Insurance Commissioners. Related: |
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Steve Hallo
Steve Hallo is managing editor of PropertyCasualty360.com. He can be reached at [email protected]
