Homeowners throughout the U.S. have seen their annual homeowners insurance premiums increase over the past three years on average by 24% — or $648 per year.
Virginia premiums have increased 31%, or $528 per year. And in Hampton Roads, they are up by 33%, or $835 per year. These figures were published by the Consumer Federation of America, a nonprofit consumer advocacy organization.
Hampton Roads homeowners have seen their annual premiums increase on average from $2,509 in 2021 to $3,344 in 2024, according to the report.
Sharon Cornelissen, director of housing for the Consumer Federation of America, said in a release that the skyrocketing price of insurance premiums is deepening the housing crisis and homeowners are feeling the strain.
“If we want to protect affordable homeownership, federal and state policymakers need to take action to address the rising costs and reduce risk for individuals and communities,” she said.
The Virginia Bureau of Insurance notes several factors insurance companies consider when they develop premiums, said Katha Treanor, communications manager for the State Corporation Commission, including the cost of home construction, costs and availability of local labor and materials, proximity to water and local services, age and size of the home and age of materials on the home’s exterior.
“Inflation directly impacts the costs of materials, supplies, appliances, personal property and labor,” Treanor said, noting insurance companies develop premiums based on the expected cost of future claims. “As the costs included in repairing and replacing a home increase, so too will the cost of providing insurance protection for that same property.”
And with natural disasters — hurricanes, wildfires and tornadoes — becoming more frequent and more severe, so is the damage to homes in their path.
Consumers are encouraged to take proactive measures such as fortified roof replacement, removing hazardous trees and installing double-pane windows to receive discounts and prevent or decrease the risk of a loss.
The report aims to serve as a wake-up call to legislators and regulators, and highlights the increasing issues surrounding housing, climate change and property insurance. The analysis used rates and pricing algorithms from the nation’s major insurance companies to generate quotes for homes with a replacement value of $350,000 based on mid-tier credit scores and included hurricane coverage for Virginia.
The Consumer Federation of America included three recommendations in the report: require insurance companies to publicly release homeowners insurance data on underwriting, pricing, coverage and claims yearly; expand mitigation programs to help homeowners better protect their homes and, in turn, reward consumers with lower premiums; and create a public reinsurance program to stabilize the market and widen the accessibility of reasonable, quality homeowners insurance.
Douglas Heller, CFA’s director of insurance, said in the report that American homeowners are facing unprecedented premium hikes, but it is the insurance commissioners and lawmakers that have not done enough to collect and make public the necessary data to find solutions and hold bad actors accountable.
Feedback wanted
Has your homeowners insurance in Hampton Roads increased significantly? Or have you had to change insurance companies due to costs? If you’d like to share your story, email reporter Sandra Pennecke at sandra.pennecke@pilotonline.com.
