Guaranteed Rate: Home Insurance Prices Up 19% in 2023

(Image courtesy of Guaranteed Rate)

Guaranteed Rate Insurance, Chicago, released a proprietary homeowners insurance study, finding home insurance prices increased 19% from first-half 2022 to first-half 2023 and 55% since 2019.

One factor influencing the prices is the increase in expensive natural disasters, but shifts in population distribution, rising home replacement costs and the effects of high inflation are also playing a part.

Coverage A limits for Dwelling continue to increase. The average Coverage A limit was $335,630 in 2019, but $429,170 in 2023–a 28% increase due to higher replacement costs and inflation.

Customers are opting for higher deductibles at an increasing rate. Guaranteed Rate found $1,000 deductibles remain common, but while 62.5% of policyholders carried them in 2021, that percentage dropped to 60.2% in 2023.

Deductibles in the $1,000 to $2,500 range have decreased 17% over the past few years. But, the $5,000 to $10,000 range increased by 49%.

The category of applying a percentage deductible (1%-2%) to wind or hurricane perils has grown by more than 200% from 2019 to 2023, while (2%-5%) deductibles have surged by 3,000%.

Looking forward, Guaranteed Rate’s report predicts further limitations on the availability of obtaining insurance from certain carriers for various reasons, with an increase in last-resort carriers where applicable.

Additionally, private flood insurance is growing–with a 163% jump in the purchase of private flood insurance year-over-year in both high risk and low and moderate risk flood zones.

Guaranteed Rate Insurance conducted the study using proprietary customer data spanning a five-year period. This analysis encompassed a detailed review of all policies placed which included nearly 50,000 home insurance policies in 2023, sourced from customers across all 50 states and insured with more than 70 insurance carriers.