December 18, 2014

Key Issues : Cost Of Homeowner's Insurance

Homeowner's Insurance Cost Moderate

The average homeowners insurance premium in 2010 (most recent year) was $743.

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 $360 million in damages from tornadoes and other severe weather events.  Flooding caused another $10 million in damages in the Great Lakes state.

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 $300 to $400 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.

Copyright 2010 by Insurance Institute of Michigan