Ken Hoagland was surprised to see his monthly mortgage payment increase recently.
“I noticed that our mortgage had gone up $100 on a $1,250 mortgage,” he said. “So, I looked into it. First, I called the mortgage company and they said, ‘It’s costing a lot more to insure your house. Talk to [the insurance company].’ So then I called USAA and said, ‘What’s going on?'”
Across the country, homeowners renewing their policies are discovering that rising material costs, supply chain disruptions and climate change are combining to drive premiums up by an average 4% to an average annual premium of $1,398, according to the Insurance Information Institute, a nonprofit organization known as Triple-I that provides information on the insurance industry. Triple-I uses data from Standard & Poor’s Global Market Intelligence for its analysis.
Since 2017, premium rates are up 11.4% on average, which means they are rising faster than inflation – and insurance experts expect that the rates will stay high.
“From everything I know about homeowners’ risk, I expected those numbers to be higher,” said Dale Porfilio, the chief insurance officer at Triple-I. “Honestly, I would say they still should go up further.”
Most mortgage lenders require borrowers to carry a homeowners insurance policy. According to a recent analysis by Bankrate.com, the average homeowner spends about…