Rising Insurance Rates
Today's buyers spend a lot of time analyzing the impact of increased mortgage rates, but they often miss the boat on rising insurance costs. Our coastal, hurricane-prone area has always had higher rates than our inland neighbors, but the topic today is much hotter. Even on policies that have been in place for years on homes with zero claims, we have seen 20%+ year-over-year premium increases! The reason? Fewer providers means less competition = higher premiums. The affordable carriers in our market exited after Hurricane Ian hit Florida and Myrtle Beach in 2022. They either stopped writing in the southeast or folded up altogether, a repeating trend we keep seeing month after month in South Carolina.
These issues are compounded on rental properties. Landlords don't have to insure contents, but the carrier still sees a non-owner-occupied property as a risk because you're depending on a non-owner to report leaks and other issues that produce more expensive claims the longer they go without remedy.
But the worst of all? Condos. Condo complexes rely on Master Regime insurance policies to cover the whole building since it's a horizontal regime with everyone owning a % of the overall property (vs a house or townhouse where the owner owns everything from the dirt to the roof). That's a lot of risk for a carrier, especially in large complexes with hundreds of units. As fewer carriers are willing to write these policies, the costs are sky-rocketing. That translates to increased monthly regime fees, now rising far beyond what homeowners can afford. And this expense is on top of your individual HO-6 policy, for walls-in and contents, which has nearly doubled in the last 8 years locally.
And lastly, insurance providers have continued to steadily assess and increase replacement costs (the cost to fully rebuild a house) due to rising costs on materials that we first saw creep up in 2020. Although many supply chain issues have improved, most of the expensive prices we first saw in 2021 on windows, lumber, paint, etc. remain today. It's comforting that you are fully covered for the amount it will actually cost to rebuild your home in the event of a total loss, but the increase to your annual premium can still be tough to stomach and add to a fixed budget.
In order to make sure you're fully covered, be sure to review your policy annually and schedule a check in with your agent when needed. Below are a few reminders of events that should always trigger a policy update or call to your agent!
Improvements and renovations - especially adding square footage and porches!
Pool install
Roofing company claiming they can "get you a free roof!" Never let a vendor complete work on your home without first verifying with your own insurance provider.
Updates to major systems such as roof, plumbing, HVAC and water heater
Thank you to Brooke Allen at State Farm for keeping us informed and covered!
Brooke Allen
843-769-8330
