Low-density single-family residential houses in Rochester, N.Y. Photo: Trongnguyen/Adobe Stock
The home insurance crisis is making it harder for homeowners to find affordable coverage, according to a recent study by ValuePenguin.
Two-thirds of homeowners saw their premiums increase in 2024, the data showed, with 25% of homeowners saying they were dropped by their insurer, up from 19% last year.
"The homeowners insurance market is under duress, and it’s creating real challenges for many homeowners," said ValuePenguin insurance expert and licensed insurance agent Rob Bhatt.
"Home insurance is becoming harder to find in many parts of the country, including California, Texas and Florida,” he added. "Many companies have had to raise their rates to stay solvent. In some cases, they’ve stopped accepting new customers or pulled out of certain areas because they've been spending more to settle claims than they’ve been earning in premiums."
Other key takeaways…
- In just a year, the rate of home insurance policyholders who worry their homes will become uninsurable nearly doubled. Fifty-percent of policyholders fear this’ll happen in the future, up from 26% in 2024.
- Those with home insurance are seeing rising rates. Two-thirds (67%) say their home insurance rates rose in 2024, though that’s lower than the 72% who reported this last year. Among those with 2024 rate increases, 38% said theirs was 10% or higher.
- Policyholders don’t expect relief soon. Three-quarters (75%) believe their home insurance rates will rise in 2025, with 44% saying their premiums are more difficult to afford now than in prior years. To save money, 34% of policyholders have downgraded or reduced their coverage.
- Insured consumers are savvier with saving. Fifty-eight percent of policyholders say they’ve shopped around for home insurance, with successful switchers saving an average of $1,034 yearly the last time. Additionally, 56% of policyholders say they asked their insurer for discounts, with those who received them saving an average of $781 annually the last time.
- Some question even having home insurance. Almost a quarter (24%) of policyholders don’t think home insurance is worth the expense, and 31% have considered self-insuring.
“The changing dynamics of homeowners insurance are creating challenges for many households,” Bhatt said.
“Insurance companies have responded to large-scale natural disasters and inflation by raising rates in many parts of the country,” he continued. “Some have stopped accepting new customers in risky areas and are even dropping existing customers.This is making home insurance harder to get and more expensive.”
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