Home Insurance Prices Increase Faster Than Inflation Rate: Policygenius

July 12, 2022

According to analysis by insurtech Policygenius, home insurance premiums are rising faster than inflation

From May 2021 to May 2022, the price of goods and services increased 8.6% in the U.S. In the same time period, home insurance costs outpaced inflation in all but one of the states Policygenius analyzed, with 13 states seeing average premium increases more than 50% higher than the current inflation rate.

During the same period, 90% of homeowners saw annual premiums increases, which average 12.1% compared to a year ago. The average increase was $134, according to the Policygenius Home Insurance Pricing Report. The study was limited to the 25 states for which Policygenius had a statistically significant number of policies. In all, it looked at 8,698 active home insurance policies quoted for renewal from May 2021 to May 2022.

“Home insurance coverage and premium amounts are based on the cost to rebuild, which takes into account the price of lumber, roofing, contractors, and anything else that goes into building a home. As home construction costs continue to outpace the overall rate of inflation due to supply-chain disruptions, unprecedented labor shortages, and frequent natural disasters, home insurance prices have followed suit,” said Pat Howard, a licensed P/C insurance expert at Policygenius.

Howard said consumers should shop around, bundle policies, and install smart home devices to lower premiums.

Key findings:

  • In multiple states, home insurance costs have increased at more than double the rate of inflation. Over the past 12 months, home insurance premiums are up as much as 18.5% in Arkansas, 18.1% in Washington, and 17.5% in Colorado.
  • New York was the only state in Policygenius’ analysis with a premium increase lower than the inflation rate, at 8%. Homeowners in New York saw the lowest increases at renewal since last year, with an average premium hike of $56.
  • Oklahoma saw the largest premium increases, with policyholders seeing their premiums go up $257 on average.

Topics Trends Pricing Trends Homeowners

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Latest Comments

  • July 12, 2022 at 8:21 pm
    Observor says:
    I believe some of the increase in Coverage A is catching up with lower than adequate amounts in prior years. The recent catastrophe events in the recent past have shown inadeq... read more
  • July 12, 2022 at 5:35 pm
    PolarBeaRepeal says:
    The stated rate of inflation of 8.6% isn't the proper benchmark. HO insurance covers many types of claims, so the CPI, as currently designed, isn't relevant. Rather, a weighti... read more

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