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How to Manage Soaring Property Insurance Rates

Property insurance rates are rising around the country. There is less capacity, and rates have increased — sometimes exponentially — for many policyholders. Florida often makes the headlines when insurers leave the state or rates increase, but most of the country is experiencing rising property insurance rates.

Read on to learn more about why property insurance rates are soaring and how you can help your clients manage these rate hikes.


Rising Property Insurance Rates Affect Most Policyholders

Several factors are causing property insurance rates to rise for many policyholders across the US. Lumber costs have been increasing, and when building costs rise, so too do home insurance costs. The cost to rebuild your home would be more expensive, so premiums increase to meet these costs.

Insurance companies have also faced record-breaking natural disasters in recent years. Climate change has exacerbated some natural conditions that can lead to a greater frequency and severity of losses, like wildfires and hurricanes. Eight out of the top 10 costliest natural disasters to hit the US have struck in the last two decades.

Soaring inflation also has an effect on rising insurance rates. Consumers are feeling this when it comes to all types of insurance premiums, not just homeowners. Some parts of the country have been more affected by increases, with Florida often making the news with record rate increases.

These macroeconomic factors affecting the price of property insurance mean it may take a few years before homeowners see relief.


Manage Rising Property Insurance Rates

It’s always wise to lower costs, especially when rates have been rising. Help your policyholders manage rising property insurance rates with these tips:

  • Bundle coverages and policies for the best rate. Check your client’s other policies and try to bundle them with the same insurer. Most major insurance companies give a discount of around 10% to customers with multiple policies, like auto, homeowners, renters, and umbrella.
  • Shop around to compare rates. If your client has had the same insurance company for several years, they are likely not getting the most competitive rate any longer. Shop around and compare rates to find a better quote. Customers who shop at each renewal or every year may be able to leverage the lowest rates possible.
  • Improve home resiliency and security. Homeowners can take proactive steps to reduce their chance of a loss. Things like adding an alarm system, clearing a defensible space around the perimeter of their home, or updating the roof can help lower property insurance premiums.
  • Make sure homeowners are properly insured. Recommend your policyholders take an inventory of their home and belongings annually or when something significant changes. Review coverages and ensure property continues to hold its value. Sometimes possessions depreciate, or people sell belongings but forget to lower their insurance. Reviewing coverages and possessions regularly helps avoid this possible over- or under-insurance.
  • Find all the discounts possible. While auto insurance policies often provide the most discounts, homeowners’ policies also offer some common discounts your policyholders may qualify for. For example, retirees are sometimes eligible for a discount, and people who live closer to fire hydrants and fire stations should see an offset for that lowered risk. 


The Bottom Line

While you can’t stop property insurance rates from rising, you can help your clients manage these increases. Talk with your policyholders to help them understand the drivers behind rate increases and give them tips to manage these rising costs. No one likes to see a premium increase, but you can work with your clients to better handle the increase and find the lowest rate possible.

Talk with other agents and brokers for more help managing rising property insurance rates. For the best network of independent agents and brokers, join the American Agents Alliance. Members enjoy valuable discounts, early access to the largest P&C event in the West, and networking with other agents and brokers.

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