Homeowners' Insurance on the Rise
- Author: Monica Jackson
- Posted: 2024-06-20
The United States is dealing with record inflation. Practically speaking, once you delve inside the government's aggregate numbers, you will find that inflation has never before been this high in America, and it's never before been this high in any nation on Earth whose currency didn't entirely collapse a few years later. This is in no way a fear-mongering piece; the United States is exponentially more stable than Zimbabwe. However, it's important that Americans understand just what the numbers say, so that they're not gaslit into believing that everything is fine and dandy. People need to prepare for these times, and a responsible media should provide them with the foreknowledge to be ready. Instead, America is a country where these high prices just seem to sneak up on people, and they have no idea how things changed seemingly so abruptly. This is the case with all sorts of different areas in America, but now you can add homeowners' insurance to that list. Insurance has drastically risen over the past month for people who own their homes, and this may just be the beginning.
Homeowners' insurance is typically calculated by dividing the home's overall value by 1,000, and then multiplying that amount by $3.50. So, if a home is valued at $400,000, that would equate to $1,400 annually with insurance. Though those are the old numbers calculated when values were lower. Some insurance companies are tacking on $5 to do those calculations, and the scary part is that this is coming in the middle of people's insurance contracts. It's not just people getting new insurance who are experiencing higher rates; it's also people with existing insurance who are seeing their premiums spike. Yes, in America, insurance companies are fully within their rights to do this. Because they're not operating as monopolies, the government's take on it is that you can just switch carriers if you're unsatisfied.
This sort of gouging of homeowners is something that has long maintained bipartisan support in politics, so do not allow media to tell you that one party is to blame while the other is innocent. They're all in on this together. The average homeowner is now paying more per month for insurance, on top of everything else.
Nothing is Immune from Inflation
The sad fact is that nothing in America is really immune from inflation. There aren't many price controls, and most economic experts agree that price controls just make things worse for the market overall, much like rent-controlled buildings are always more prone to fires and damage and are in a state of disrepair. So, what Americans are seeing is that everything is going up in cost, while nothing much is happening in terms of their wages going up. This is definitely hitting poorer people harder than others, despite the fact that the Paul Krugmans of the world pen op-eds in the New York Times about how inflation only matters if you're wealthy. Americans live in a world where the elite class sneer at them for three of every four years, and then pretend to care about them when asking for their vote. So it makes sense that insurance would spike along with everything else.
Expect Prices to Keep Rising
Perhaps the scariest thing about homeowners' insurance going up is that it's just now starting to. Like with gas, or with eggs at the grocery store, the initial shock of the price increases never gave people time to adjust before more price increases happened. Every single week, groceries and fuel costs more money. Some economic experts suggest that insurance rates may go up at least three times a year, to keep up with inflation. And that's really the crux of the matter: These insurance companies do not need to charge more; they want to charge more in order to stay competitive and keep up with inflated rates.
State by State Rates
It's much harder to pay insurance in some states than in others. California, New York, Oregon and Washington, for instance, are going to charge a whole lot more for insurance than states like Mississippi or South Dakota. There are a couple of reasons for this. First and foremost, the home values in the former states are much higher than in the latter, so any sort of calculation is going to result in a higher premium. Add to that the fact that home values keep rising due to a housing shortage and bidding wars, and insurance companies are adjusting rates on the fly to reflect that, even if you haven't had your home re-appraised. Another reason is that overall inflation is higher in these states, and so insurance companies charge accordingly.
As a homeowner, be aware that your insurer may start raising your rates regularly.
