Homeowner Insurance Costs Soar
Homeowner insurance costs soar in 2024 even after a run-up in 2023. Why? Some blame climate change and more disasters. However, that really is snake oil. The number of disasters each year – hurricanes, tornadoes, wild fires, hail/freezes and other incidents – varies. But overall, the trend in total is downward.
So why did homeowner insurance costs soar? Primarily, third factors contributed. The largest single factor is the unprecedented quick run up in home prices. The second is the rapid run up in labor costs. A third contributing factor is the run up in materials prices. Increases is labor costs force increases in materials costs. Increases in energy costs contribute to increases in materials costs also. Increases in energy costs result substantially from the Obama/Biden goal of forcing expensive and unreliable wind and solar costs on consumes and businesses. Coupled with decommissioning nuclear, phasing out coal, and limiting gas and oil production, energy costs about doubled from 2020 to 2024.
Home Price Increases
FOMO bidding of home prices nearly doubled home prices in much of the US in 3-4 years. A doubling of home prices will result in at least a doubling of homeowner insurance costs. Remote work contributed to pursuit of larger home spaces and decentralization of work locations. In addition, the cost of new homes rose commensurate with existing home prices. Labor, materials and builder profit expansion factored in here also. All real estate prices increased, not just homes. The resulting increases in prices meant that a storm that would have caused $1 in damages in 2020 caused $2 in damages in 2024. According to recent studies, the number of $1 billion damage disasters in Texas doubled. That goes exactly to reason.
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Higher home prices.
Higher insurance costs
Higher troperty taxes
Higher repair costs
Higher mortgage rates