What Are Some of the Main Things That Cause Home Insurance Rates to Go Up?

In this economy, most people can expect their home insurance rates and the cost of materials and supplies to go up this year.

Rates are going up because of several things. As bad weather happens more often, it causes more serious damage and more expensive insurance claims. Home repairs are rising because of the rising cost of building materials, problems with the supply chain, and jobs that can't be filled because of COVID-19.

Extreme Weather and Natural Disasters

Hurricanes, floods, droughts, wildfires, and other types of bad weather are happening more often, causing more damage and costing more money. In 2021, the US had 20 weather events that caused losses of more than $1 billion each. As the damage caused by weather increases, so does the overall insurance cost. Most of the time, insurance companies change rates by state based on actual and expected weather-related losses.

Costs of Materials Going Up

When figuring out how much homeowners insurance costs, the cost to fix or rebuild a home after a loss is another important factor. During the pandemic, these costs have gone up a lot because:

• A rise in demand for home improvements in general.
• A general rise in the demand for new buildings.
• Supply chain problems in the US and in other countries.
• Most building materials are hard to find and expensive because of all of these things. Here are some examples of price hikes that will happen in October 2021:
• Over the past year, the price of materials for building new homes has gone up by 18.6%.
• Lumber and products made from wood are up 6.2%.
• Over the past year, asphalt roof materials have gone up 16.3%.
• As the cost of the building goes up, so does the cost of fixing or replacing homes that have been damaged by covered events.

Job Openings in Skilled Labor

Even though the number of new homes and projects to fix up old ones is on the rise, the construction industry is having trouble finding skilled workers. As of August 2021, 358,000 jobs were open in the sector, which was more than twice as many as was expected to open each year.

Things are hard on the market right now. The number of terrible weather events is going up. Rate changes are being caused by problems caused by the pandemic, such as a lack of building materials and skilled workers. But there are some things you can do to lower the premiums you have to pay. The smart thing to do is to use them.