Insurance Institute of Michigan
September 18, 2018

Key Issues : Cost Of Homeowner’s Insurance

Homeowner’s Insurance Cost Moderate

The average Michigan homeowner paid $734 for home insurance in 2005.

Homeowner’s insurance rates are moderating after years of increases due to a flood of catastrophic losses and increased costs for home repairs and replacements.

Michigan sustained $1 million in flood damage in 2007. Tornadoes and other severe weather caused an additional $150 million in damage.

The increasing cost of home construction and repairs continues to impact homeowner’s insurance rates. According to the National Association of Home Builders, the median and average price of new and existing homes more than doubled in the last two decades. National statistics show that between the years 1998 and 2004, the cost of home repairs increased 30 percent per year – two times faster than the overall average rate of inflation during that period.

Fraudulent claims also drive up expenses. Property/casualty insurance fraud costs the average policyholder about $200 to $300 a year.

To save money on homeowners insurance, choose higher deductibles, install smoke detectors and burglar alarms, install dead-bolt locks and shop around for the best combination of service, price and product.

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