2021 Hits Will Impact Your Homeowners Insurance in 2022
With a massive ice storm sweeping through the Midwest, 2021 did not start well for the insurance industry. Add the usual bout of hurricanes, wildfires, hail, and tornadoes along with the rising cost of building materials and labor, and 2021 was not a good year in our industry.
The average annual rate increase for homeowners insurance is typically 8-12% each year. This rate includes not only the state and company-wide general increase but several other factors specific to you and your home. However, in 2022, we can expect the average homeowners' insurance to nearly double to 12-25%.
While this may seem drastic, several factors need to be considered:
Building materials have increased and will continue to do so.
Labor costs have also increased. The increased cost is not only for the contractors that work directly on your home but also for those employed by the insurance companies: underwriters, adjusters, customer service representatives, etc.
2021 held some of the largest 'catastrophic' events the industry has seen.
Years like 2021 cause a lot of motion in the industry as well. New companies come into the market, and current companies leave. This change is typically because of rate adjustments- new companies can offer lower rates, and companies that want out of the industry will increase their rates as high as the state will allow.
Like most professionals, I listen to my fair share of industry podcasts, sit through forums, and try to keep up with all the happenings. Long story short, the pots were drained in 2021, and they need to be filled back up in 2022.
While this is unfortunate news for some, this is where Independent Agents shine. Because The Alms Group Insurance is an independent agency, we can shop multiple companies and move clients from a company that may be pricing themselves out to a different company that is more in line with the market, if not lower. We can offer a solution to the dreaded "Why did my rate go up so much?" question, or at least verify that any new rate we find will be in line with other companies in the market.
If you suspect you could get a better homeowners' insurance rate, give us a call at 785-370-0722!