Homeowners insurance premiums rising amid mounting weather-related losses, inflation: report
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Homeowners are feeling the financial sting of higher insurance premiums as firms offering homeowners insurance policies look to mitigate mounting losses from weather-related incidents and inflation that have cut into profits, according to a new report by Moody's.
The report found homeowners insurers have, on average, paid out more in claims than they've received in premiums, with the so-called combined ratio reaching 101.3% over the last decade and topping 100% each year since 2020. To preserve profitability amid mounting costs, insurers have increased premiums charged to homeowners.
«In the last five years (2019 to early 2024), most of the country has seen double-digit rate increases,» Evelyn Ocas Salazar, AVP-analyst for the Financial Institutions Group at Moody's Ratings, told FOX Business. «In 2023, 80% of the country saw double-digit rate increases of up to 30%, with the higher end of the scale in areas more prone to weather-related risk.»
Much of the rise in payouts has been attributed to damaging storms and the rising cost of materials needed to repair and rebuild damaged properties.
SURGE IN HOME INSURANCE COSTS ADDING MORE INFLATION PRESSURE ON AMERICANS
Population growth in states like Florida that face threats from hurricanes has contributed to the rise in homeowners insurance claims. (Eva Marie Uzcategui/Bloomberg via Getty Images / Getty Images)
In 2023, property and casualty insurers reported $58 billion in losses due to severe storms, which Moody's noted surpassed both the 10-year average and the prior record set in 2020. That came a year after
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