Why are insurance costs rising for homeowners?
Recent trends are impacting how much protection you’ll need and the price you’ll pay for it.
Bigger, upscale homes: Home interiors have become more upscale with custom cabinetry, hardwood floors, finished basements and more, leading to higher replacement costs when damages arise.
More severe weather: There have been 18 weather/climate disaster events in the U.S. in 2021 with losses exceeding $1 billion in damage. The increase in severe weather caused 39% of all U.S. home insurance claims.
Higher material costs: With the cost of building materials up an average of 26%, homes have become more expensive to fix and replace.
Increase in water damage: Water damage and freezing losses have increased by more than 10% from 2017 to 2019.
More fire damage: Newer homes burn more nearly 6x faster than older ones due to the use of synthetic materials and open-floor plans, resulting in more total losses from fire and higher rebuild costs.
Increased shipping costs and delays: The pandemic has impacted almost every part of the global supply chain causing shipping delays and higher prices. 95% of Fortune 1000 companies have reported supply chain disruptions from COVID-19.
Higher labor costs: Nearly 90% of contractors are having a hard time finding craft workers and 88% of firms are experiencing project delays. Higher labor costs drive up the price of materials leading to a rise in home insurance
We can help you avoid your home being underinsured.
Contact your agent today to make sure you have the right coverage… and enough of it.
All products are underwritten by The Hanover Insurance Company or one of its insurance company subsidiaries or affiliates (“The Hanover”). Coverage may not be available in all jurisdictions and is subject to the company underwriting guidelines and the issued policy. This material is provided for informational purposes only and does not provide any coverage. For more information about The Hanover visit our website at www.hanover.com. ©2021 The Hanover Insurance Group. All Rights Reserved. Sources: NOAA, Insurance Business America, Insurance Information Institute, NAHB, AGC, New York Times, Accenture, Underwriters Laboratory