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Home Insurance Rates Increasing Due to Inflation

Home Insurance Rates Increasing Due to Inflation

October 10, 2022


Is Inflation Affecting my Home Insurance Rate?

A standard homeowners insurance policy includes an inflation index. This is included to increase your coverage by some every year, in hopes that the policy keeps up with inflation. Due to this increased coverage, it is typical to see your home insurance premium increase yearly. In addition to this, insurance carriers can also adjust their rates. This will further impact your rate.

How do you know if your policy is staying competitive with rising inflation?

If the coverage and prices are increasing, how do I know my policy is staying competitive? It can be a fine line to understand if your home insurance has increased by a normal amount. Typically, we review these types of increases based on a percentage. With the inflation index, it is normal to increase 5-10%. Right now, we are seeing it closer to 10% due to the increased inflation.

Can I switch carriers to save money?

There are carriers that are making substantial increases to their rates. If you have one of these carriers, you might be able to save by switching!

  • Safeco Insurance has increased its rates substantially.
    • In October 2021, they made a 4% increase in their home insurance rates. That is a moderate increase, and most customers did not notice a difference.
    • In October 2022, they announced a significant increase of 20% for new customers. For existing customers, their increase will be 15%. Meaning, if you are shopping for your insurance and get a quote with Safeco today, it is 24% higher than it was in September 2021. If you are an existing customer, it is 19% over the last two renewals. Those increases do not include the inflation protection factor either.
      • We recently were able to save one of our newly insured $570 a year on their auto and home insurance when they shopped their policies prior to renewal.
  • In a recent article with data from S&P Global Market Intelligence, Liberty Mutual Insurance is another carrier that has significantly made a rate increase.
    • They had 34 rate-hike approvals across fourteen states in March of 2022. In the state of Ohio, we are starting to see the effects. We have been able to save several customers hundreds of dollars by leaving the carrier that allows you to “customize your insurance.”
    • Here are a few examples we have had in August and September 2022:
      • One client had been with Liberty Mutual for 3 years. After reviewing their auto and home insurance, we saved them almost $500 a year, which was a 24% savings for their family.
      • An individual had just purchased their car and home insurance with Liberty Mutual in July. After reviewing, we increased his coverage and saved over $250 a year on his car insurance. Another saving of 23% a year on his auto insurance.
      • Another customer had his auto insurance policy cut in half! His new rate was $1,128 less for the prior term with matching coverages.
      • Our biggest win was for an individual that had bought their home 2 years ago and insured with Liberty Mutual. This year at renewal, they saw increases of over 35% on each policy!! Our new policy for him ended up increasing his auto insurance liability coverage, added coverage for his barn and garage, AND still saved almost $800 per year!
  • The S&P Global Market Intelligence completed another analysis in April which showed that Farmers Insurance had the second largest increase in premiums (second to Liberty Mutual). They had 19 rate hikes in April. This is another carrier in that we have seen the results of these increases.
    • Here are more examples from August and September 2022:
      • While purchasing a new property, we were able to provide higher coverage and lower rates for a family of three. They saved on their three vehicles and RV insurance, which helped with closing on a new home.
      • Another couple reviewed their auto and home insurance at renewal. We were able to add endorsements that they did not currently have AND save $410 a year on their home insurance, which is a 39% savings!
      • Our most significant win over Farmers Insurance was for a family of four. We were able to save just under $1,000 a year on their auto and home insurance! On top of the savings, we increased their auto insurance liability. In addition to saved premium, the insured’s value of their home was almost doubled as the inflation index had not kept up with inflation.

Those are just some examples of how we were able to provide better rates / coverages to former customers of Safeco, Liberty Mutual & Farmers Insurance. If you have questions about your renewal or want us to review our options, we would love to help you.

Here at Hitchings Insurance, we are an independent insurance agency that represents multiple A-rated insurance carriers to find the best product at the best rate for you. To get started, simply click on the START A QUOTE below. We look forward to seeing if you can be another success story.