Most consumers have been in this position: You want to renew a service, but the provider says you now must pay a higher price. It often happens with cable and internet services, and it’s common with insurance rates, too.
As natural catastrophes increase in frequency and severity, property values rise, and new constructions open the door for more homeowners, home insurance premiums also will continue in an upward trend.
An analysis from ValuePenguin estimates the average cost of home insurance in 2020 to be $1,445 — 59% more than the average premium in 2010. The company also found that 31 states have seen home insurance rates outpace the cumulative rate of inflation (9.14%) within the past five years, according to rate filings. ValuePenguin estimates rate increases in 44 states for 2020.
To understand why home insurance rates increase more in some states and not others, ValuePenguin evaluated the industry loss ratio (claims paid divided by premiums) in each state. “In states where insurers post very high loss ratios, rates tend to increase significantly in the following years,” says ValuePenguin. “For instance, California’s devastating Camp Fire in 2018 led to $16.5 billion in wildfire damages. As a result, the state’s insurance industry experienced a loss ratio well over 100%, and their rate filings for 2020 reflected the most aggressive increases in the country.”
In the slideshow, discover the 10 states where consumers are most likely to see higher home insurance rates this year, according to ValuePenguin. To determine the list, ValuePenguin analyzed data and loss ratios from public insurer filings across the country, and rate filings and reported loss ratios from the top 10 insurance groups by market share across all 50 states.