Arizona has become the leading state in the US for home insurance rate increases, with premium costs soaring by 62% since 2019. This is attributed to a combination of rising home values, extreme weather events that have resulted in losses exceeding $1 billion each, and inflation pushing up the cost of building supplies needed for repairs. Insurers are leaving states with more extreme weather, causing rates to rise for everyone. Across the US, home insurance rates have increased by 37.8% since 2019. The Arizona Department of Insurance and Financial Institutions is currently compiling data on the state's annual premium rates.
As homeowner's insurance prices continue to climb, more Americans are choosing to forego coverage altogether. In 2019, the number of uninsured homeowners stood at 5%, whereas in 2024, it has jumped to 12%. This trend is particularly concerning as it leaves many households without any financial protection against potential disasters. The retired high school teacher, Anjali Tierra, is one such individual who decided to drop her homeowner's insurance policy due to the increased cost in 2019 and has since been unable to find affordable coverage. She has been rejected by every insurance company she contacted.
Climate change is also contributing to rising insurance costs across the country. Areas previously unaffected by severe weather now face increasing premiums due to climate change-induced risks. Insurers are raising premiums across the US by the maximum amount regulators allow because of outsized losses. Bob Bunting, CEO of the Climate Adaptation Center and former lead forecaster for the federal government, has stated that there are increased disruptions everywhere and insurance is getting more expensive.
Maine is expected to see the second-highest increase in home insurance rates this year, with an average annual payment of nearly $1,570. Home insurance carriers in Maine raised rates by almost 15% on average so far in 2024. This is a reaction to recent punishing storms across the state and insurers anticipating more intense weather in the future due to climate change. The price for home insurance is also affected by growing home values, higher costs for building materials and labor, and not every insurer has asked for an increase in rates.
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