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How To Navigate the Volatile Homeowner's Insurance Market

Written by Lanie Raphael on

The Story

The cost and availability of homeowner’s insurance in the United States are reaching critical levels, impacting the housing market. The rising frequency and severity of weather events have led to a 21% average increase in premiums from May 2022 to May 2023, surpassing the previous year's 12% rise. Insurance giants are abandoning states, leaving residents with fewer and costlier options.

Skyrocketing property insurance costs are affecting home sales, making condo buildings ineligible for mortgages, and discouraging investment in new apartments. Insurers face underwriting losses due to weather-related events, prompting reinsurance costs to surge, which are passed on to customers. Migration to disaster-prone areas like Florida contributes to increased demand for insurance. Some insurers limit business in high-risk states, and seven property insurers in Florida have entered insolvency since 2022.

As insurance burdens rise, more homeowners opt to forgo insurance, and the lack of affordable coverage is impacting home purchases, with some deals falling through. Condominiums also face soaring insurance premiums, affecting owners and potentially hindering mortgage qualification for the entire building if delinquencies occur. Consumer groups advocate for state intervention to ensure reasonable insurance rates and limit development in high-risk areas. The situation highlights the broader impact of climate change on the housing market and the challenges of providing affordable and accessible homeowner’s insurance.

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Lanie Raphael of B. F. Saul Insurance Responds

Navigating today's insurance market poses challenges for homeowners, commercial property owners, and condo associations. As a consumer, you may need to reevaluate your insurance approach. If you lack an independent insurance advisor, now is the time to reach out to one for expert insights, especially considering the limited insurance options available. Independent advisors can shed light on the evolving real estate landscape and guide you through potential impacts on transactions.

Even if a real estate transaction is not in your immediate future, these market shifts will likely affect your premiums. Take a proactive stance by consulting an independent advisor about risk reduction measures, such as automatic water shut-off devices, water sensors, electrical surge detectors, and generators. Also, consider higher deductibles and coverage for catastrophic loss rather than minor issues. 

In this dynamic environment, renewing policies is no longer routine. Embrace a proactive risk management approach to position yourself as a 'superior' risk, helping secure comprehensive coverage while keeping premiums reasonable. Seek out an independent insurance advisor who not only understands the insurance landscape but who can communicate that knowledge with you and help you find the best solution for your individual needs.

Want to learn more about how an independent insurance advisor can help you navigate homeowners’ insurance? Contact the B. F. Saul team today.

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About The Author

Lanie Raphael is a seasoned insurance professional with over 30 years of experience in the industry, with experience in both commercial and high-net-worth insurance. Throughout her career, Lanie has held executive-level roles at prominent insurance companies such as Fireman's Fund, AIG, and ACE Private Risk Service in a variety of disciplines including risk management, product development, operations, and marketing. In the past decade, she transitioned to the independent agency side, assuming leadership roles that involved direct client interaction and working closely with referral sources. As president, she is responsible for leading all aspects of financial reporting and budgeting, business development, and executive recruiting at B. F. Saul Insurance.

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