Farmers Insurance Group and the United States Automobile Association (USAA) increased home insurance premiums by nearly 15% this year, higher than all other major insurers, according to a recent report.
The national average hike in homeowner premium rates was about 8.8% through August, according to the October 3 S&P Global Market Intelligence report.
Through September 1, the owner-occupied homeowner policies of Farmers and USAA posted year-to-date effective rate increases in the double digits, S&P said. Farmers lead the way with a 14.8% increase, narrowly exceeding USAA’s increase of 14.7%.
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Neither Farmers nor USAA responded to Kiplinger's requests for comments.
While most states are seeing significant rate increases, others are seeing insurers completely pull out following devastating weather events, Kiplinger previously reported. Earlier this year, for example, both AAA and Farmers abandoned home and auto coverage in Florida and State Farm stopped business and personal property coverage in California.
According to the S&P report, Farmers raised rates across 43 states, about 65% of which had a calculated weighted average change of more than 10%. This includes effective rate hikes of 25.3% in Illinois, a 25.1% in Texas and a 23.8% in Tennessee.
USAA increased rates across 44 states, about 60% of which had a calculated weighted average change of more than 10%, S&P said. This includes a whopping 36.6% effective rate increase in Arizona, 34.7% in Colorado and 30.1% in Tennessee.
Progressive recorded the largest year-to-date effective rate change in any state over the first eight months of 2023 with a 57% increase in North Carolina, S&P said. The increase became effective on June 19 for the company's renewal business.
Macroeconomics at play
“Macroeconomic conditions continue to plague US personal lines-focused insurers as the past two years have seen a higher-than-average rise in homeowners insurance rates,” S&P said. “Between 2018 and 2021, the countrywide yearly average change was in the 3% range but jumped to about 6% in 2022."
Homeowner insurance is required by most mortgage lenders and is typically included in your mortgage payment. It is designed to protect both you and the lender. There are several ways to help you save on your policy, including bundling your homeowners insurance with your auto policy as well as taking advantage of discounts, such as paperless documents.
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FAQs
Through September 1, the owner-occupied homeowner policies of Farmers and USAA posted year-to-date effective rate increases in the double digits, S&P said. Farmers lead the way with a 14.8% increase, narrowly exceeding USAA's increase of 14.7%.
Why is USAA homeowners insurance so high? ›
USAA homeowners' insurance tends to be more expensive due to its commitment to high standards for comprehensive coverage, superior customer service, and consideration of location-specific risk factors.
Is USAA dropping homeowners insurance? ›
30, 2023: USAA announced it will begin to limit California home insurance coverage in March 2024. USAA plans to tighten its wildfire safety standards and only insure homes with a wildfire risk score below 12, with 32 being the highest possible.
Did USAA raise their insurance rates? ›
USAA raised rates in 44 states through the first eight months of 2023, with about 60% having a double-digit calculated effective rate increase. The 36.6% effective rate change in Arizona is the largest for the Texas-based insurer.
Did farmers insurance increase their rates? ›
All 10 of the top auto insurers in the U.S. imposed double-digit increases throughout 2023.
What are the disadvantages of USAA? ›
Disadvantages of USAA home insurance include limited extra coverage options and availability since the company only writes policies for homeowners with military affiliations.
Who has better rates than USAA? ›
State Farm, Geico, and Progressive are better than USAA, based on factors like average premiums, number of discounts available, and customer service record.
What is the average homeowners insurance with USAA? ›
With an annual average rate of $2,196, USAA homeowners insurance costs less than the national average of $2,417. USAA is also less expensive than many of our top picks for home insurance companies, including State Farm, Allstate and Nationwide.
Is USAA cheaper than other home insurance companies? ›
USAA offers policies to active-duty military members, veterans and their families. Its home insurance includes coverage that often costs extra when issued by other companies, but even so, the company's rates are still lower than the national average, according to NerdWallet's rate analysis.
What has happened to USAA? ›
For 2022, USAA reported a net loss of $1.3 billion, its first loss for a full year since 1923 — 100 years ago. Also, USAA said its net worth — basically, the difference between what it owns and what it owes — declined dramatically from $40.1 billion in 2021 to $27.4 billion in 2022.
If we increase rates it may be because repair and replacement costs have gone up, and we have to make sure we can cover future claims. We never raise rates to make up for past claims.
Why does USAA have an F rating? ›
A check of the BBB website provides a few answers. The failing grade is due to two stated reasons. The first is that the company agreed this year to a $15 million settlement with the U.S. Consumer Financial Protection Bureau over how USAA's banking arm mishandled thousands of personal checking accounts.
Why is homeowners insurance so high in 2024? ›
Why did your homeowners insurance go up? (Updated May 2024) The increase in expensive natural disasters and higher-than-average labor and construction costs have caused home insurance rates to skyrocket.
Why is my home insurance doubling? ›
Why homeowners insurance rates are rising. Several factors are making homeowners insurance more expensive: The increase in the number and severity of hurricanes, floods, tornadoes and other harsh weather has led to a spike in claims in many parts of the country.
Why is my farmer's bill so high? ›
Farmers is so expensive because of agent commissions and rising costs overall for insurance companies. At $1,044 per year, the average Farmers car insurance policy is a lot more expensive than the national average of $671 per year for a policy with minimum coverage.
Why is homeowners insurance increasing so much? ›
Hurricanes, floods, droughts, wildfires and other severe weather events have become more frequent, destructive and costly. As of October 11, 2022, the United States sustained 15 weather events with losses exceeding $1 billion each. As weather-related damages go up, so does the cost of insurance overall.
Is USAA homeowners expensive? ›
With an annual average rate of $2,196, USAA homeowners insurance costs less than the national average of $2,417. USAA is also less expensive than many of our top picks for home insurance companies, including State Farm, Allstate and Nationwide.
Is USAA good home insurance for homeowners? ›
USAA Homeowners Insurance ranks among the top home insurers for its customer experience. As a USAA member, you'll get quality coverage and exceptional service.
Why does USAA keep raising rates? ›
If we increase rates it may be because repair and replacement costs have gone up, and we have to make sure we can cover future claims. We never raise rates to make up for past claims.
Who is the most expensive homeowners insurance? ›
Progressive has the cheapest average annual cost for homeowners insurance across the dwelling coverage limits we analyzed of $200,000, $350,000, $500,000 and $750,000. Travelers is the most expensive homeowners insurance company for $200,000, $350,000, $500,000 and $750,000 dwelling coverage amounts.
