The trend: The average annual cost of homeowners insurance in the US has reached nearly $2,370, a 70% increase over the last 5.5 years, per Yahoo Finance. This makes it one of the fastest-growing costs of homeownership, outpacing increases in home prices, mortgage rates, and property taxes.
Why that matters: Many US consumers are being priced out of homeowners insurance. For prospective homebuyers, higher rates are derailing purchases. Both trends threaten demand for homeowners insurance and P&C insurers’ bottom line.
What insurers can do about it: In most cases, insurers can’t just cut prices. But they can lower risk in ways that help bring premiums down. For example:
- Offering discounts for mitigation efforts: storm shutters, hurricane-proof windows, fire-resistant roofs, flood barriers, smart home devices
- Rewarding good maintenance: updated electrical/plumbing systems, flood mitigation efforts
- Using AI and satellite data to model risk more precisely
- Offering apps or dashboards for homeowners to track maintenance, monitor risk, and receive proactive alerts