Homeowners face increasing struggles as their home values continue to fall and maintenance costs continue to climb, with a new setback consisting of significantly higher insurance payments.
Insurance rates for homes have been increasing steadily over the last few years, and the Insurance Information Institute has indicated that this year is expected to continue in that trend, with a rise of about 5 percent to reach an average of $1,004. This will have been the largest annual increase since the start of the recession, and will mark the first time that the national average premium has risen above $1,000.
Some states will experience higher premiums increases than others. For example, GuideOne Insurance in Georgia expects to increase its own rates by 12 percent, beginning this month. Similarly, in Texas, Farmers Insurance will raise its rates by an average of 10 percent. Citizens Property Insurance, in Florida, and North Carolina Farm Bureau will increase some of their homeowners and condo insurance rates by 6 percent and 21 percent respectively. In Pennsylvania, last month, Allstate already increased their own rates by 15 percent.
Unfortunately, the greater the increase, the more difficult it is for homeowners in the United States, in a time when many are already struggling to make their mortgage payments, have already fallen behind, or are drowning in unmanageable debt.
The insurance companies have explained that the reason for the rate hike is, in part, to cover the increasing costs that they are experiencing, such as for the record breaking insured catastrophe losses in the country last year, which totaled $35.9 billion.
