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Are Your Georgia Home Insurance Prices Surging?

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General home insurance policy premium increases

Has your Woodstock, Georgia, home insurance premiums go up? You are not alone, Home Insurance Premiums Surge across Georgia.

Keep reading for valuable insights on Homeowner’s Insurance premiums and how they have been soaring throughout the US. Average Home premiums for households are expected to continue to rise significantly in the second half of 2023 and beyond, including in states like Georgia, which are climbing homeowners insurance rates. Home insurance is expected to rise by at least $14 per month. And for states like Georgia, the increase is even sharper. The rend of rising is not sudden homeowners insurance rates, as in 2022, many homeowners in the US already saw their premiums increase by over 15%.

Georgia is already more expensive than other states

The Insurance Information Institute released statistics showing the national average for home insurance premiums as $1272. News Channel WTOC out of Savannah, GA, reported numbers from the Insurance Information Institute, Georgia, was almost $100 more expensive at $1362. Georgia experienced the 7th highest hike in home insurance premiums in 2022.

Insurance isn’t always included in everyone’s budget.

There’s no doubt that the price of living is rising. Real estate prices have risen at an unprecedented rate, affecting condominium prices as well. But an increase in home insurance cost isn’t something everyone plans for. For that reason, more people like you are checking out their options.

Why home insurance, and What is it?

According to the Office of Commissioner of Insurance and Safety, Home insurance, also known as homeowner’s insurance, is a policy that covers damages and losses to your private residence. The policy may also include insurance that covers your private residence’s contents, including clothes, electronics, furniture, and valuables. The amount of coverage that your home insurance policy provides depends on the type of policy you buy, your deductible, property value, liability insurance limits, and other factors. In general, a home insurance policy will cover the following:
  • Damage that might befall your home
  • Dwelling coverage protects your investment in any other detached buildings
  • The contents of your home and your personal belongings
  • Any additional costs suffered as you live somewhere else because your home is too damaged
  • Personal liability. This protects you from claims or lawsuits that originate from any accidents that happen on your property that cause damage to their property or personal injury

A good home insurance policy will provide you with peace of mind, knowing you are financially covered against these types of events.

Unlike vehicle insurance, Georgia does not require home insurance. However, most mortgage lenders will require home insurance coverage for most people to qualify for and maintain a loan.

The image has a textured background with dark green and Brown background with the decorative arrows pointing to the definition of Home Insurance as given by the Georgia Office of the Commissioner of Insurance and Safety Fire "Also called homeowners insurance, covers losses and damages to your private residence and its contents, such as furniture, valuables, clothes, and electronics. The amount of coverage it provides varies depending on the type of policy you buy, its liability limits, your deductible, property value, etc. Most policies do not cover motorized vehicles or losses from natural disasters like floods or earthquakes. You can usually buy coverage for these things in a separate policy."

So, why are premiums rising, and why is home insurance so high in Georgia?

Inflation

Inflation, getting less for more, has hit American families hard everywhere, from real estate to vehicle insurance. Inflation is driving up home insurance premiums due to several specific building and claims events.

Increasing building materials costs

Home insurance pricing is largely based on what it costs to rebuild your home in the event of large-scale unforeseen damages. Inflation’s most obvious impact on home insurance is that it costs more to build a house, primarily because building materials costs have risen sharply. From March 2021 to March 2023, roof material costs increased by nearly 25%. From June 2020 to June 2023, wood and lumber product prices increased by 25%. In fact, there has been nearly a 30% increase in the cost of the net inputs required to repair or build a house in the last three years.

Since the cost to repair or rebuild a home in the event of a loss is a core consideration when pricing homeowners coverage, increased building material costs mean higher premiums.

Increasing human costs

Inflation also increases the cost of hiring a contractor, which, when paired with the higher cost of building homes, means that insurers will have to pay more to rebuild a house. Not only has general inflation impacted the cost of personnel, but a general skill shortage in the sector is also relevant. The Associated Builders and Contractors, a national construction industry trade association, reported towards the end of 2022, there were nearly half a million unfilled roles in construction in the US. Thus, higher human resource costs are also increasing the cost of rebuilding. Materials are harder to source on average, and finding skilled tradespersons is increasingly an issue.

Graph showing data from the Fed Reserve out of St Louise that the cost of material for residential construction has gone up 35% since 2018. This graph was created to provide supporting evidence of why home insurance premiums have gone up over the past couple of years. The article posted on White Oak Insurance Services provides additional content as to why the premiums are going to continue to go up but also why White Oak Insurance Services is in a natural position to help home owners find a policy that fits their needs at the best possible price.
A family of four sitting on the floor of their living room having fun. The mother and father are holding their hands over the children's heads simulating a roof top.

The impact of local and national natural disasters

Droughts, floods, hurricanes, fires, and other natural disasters also deeply impact home insurance premiums. Both local and national events are relevant. Last year was the 3rd most expensive year for natural disaster-related damages in the history of the US, with $177.3 billion in costs. There were 18 different events with damages exceeding $1 billion. Even with the dollars being adjusted to CPI 2023 dollars, that was the 4th highest number of billion-dollar natural disaster events. These severe weather events often cause significant damage to homes and property and, in turn, drive up the cost of insurance, especially when it comes to coverage limits for your dwelling and personal property.

Learn how to protect your Home, Property, and Family by preparing for the hurricane season.

Insurance providers adjust premiums based on the expected losses related to weather conditions. The general pattern is that there have been more natural disaster loss events in recent years than in earlier years. As a result, insurance companies are raising homeowner’s coverage costs.

Locally, home insurance is as expensive as it is in Georgia because of the state’s susceptibility to natural disasters, especially in the Peach State. Georgia is located in a part of the US prone to severe weather events such as tornadoes, hurricanes, tropical cyclones, floods, and wildfires. These severe weather events, including the devastating Hurricane Idalia in 2023, often cause significant damage to homes and property in Georgia, driving up the cost of insurance, especially regarding coverage limits for your dwelling and personal property. The impact of local and national natural disasters cannot be ignored when considering the cost of home insurance in Georgia.
 
Many coastal homeowners, like those in Savanna, GA, need to be properly prepared for storm surges that may follow a tropical storm such as a hurricane or tropical cyclone. Reports show that just as much damage can occur during the associated storm surge after a tropical cyclone caused by rising waters that flood and damage property. Flood insurance is only sometimes offered as part of a basic homeowners insurance policy, leaving homeowners vulnerable to potential flood damage. However, homeowners in at-risk areas can protect themselves by purchasing flood insurance through the National Flood Insurance Program or a separate policy from a private company.
 
For more information on properly preparing for a hurricane or tropical cyclone, check out our hurricane preparedness guide. It also includes resources on evaluating your needs and obtaining flood insurance.
 

Significant losses and falls in insurance industry income.

Another factor leading to increased home insurance premiums is the recent loss in the insurance industry on the whole. At the same time as increased inflation, labor shortages, and increased weather events, insurers had an underwriting loss of $3.8 billion in 2021. This jumped to $26.9 billion in 2022. It was the largest loss in a single year since 2011. This loss cut industry profitability by a third, from $62.1 billion to $41.2 billion.

Legal system abuse

A pattern of partly fraudulent activities has also been responsible for putting pressure on premiums. The focus point for such activities has been Florida. Typically, door-to-door contractors offer to get a new roof for homeowners who may or may not have been affected by severe weather events. The homeowners, in return, have to assign over their benefits from an insurance contract. The contractors then engage in litigation with the home insurance providers if the providers refuse to pay. The United Nations Office for Disaster Risk Reduction found that insurance companies in Florida lost over $3 billion per year in litigating frivolous and fraudulent matters. Unfortunately for homeowners, those losses are passed on to consumers in the form of premiums.

Imposed Limits on Premium Increases by State Legislatures

As a safeguard against exorbitant insurance premium spikes, several states, including Georgia, have instituted regulations that set limits on annual rate hikes. These limits effectively cap the amount by which premiums can be raised in a single year. Such measures aim to balance policyholders’ needs with insurance providers’ operational requirements. Lawmakers acknowledge that home insurance companies must adjust premiums to accommodate inflation and the escalating costs of homes, ensuring their financial sustainability. However, it’s worth noting that the kind of inflation rates seen in recent years have not been seen in the United States since 1974, creating a disparity that insurance carriers can’t bridge within a single year. This is another reason why your home insurance premium may have increased uncharacteristically this year.

How White Oak Insurance Services Can Help

Though there might not be much you can do about current economic conditions, we at White Oak Insurance Services can help you plan around keeping the cost of your home insurance coverage in check. With long-reaching connections and contacts in the industry, we have strong and long-standing relationships with more than 30 large Insurance Providers. We provide our clients with some of the best quotes in the shortest time possible.

Things you can do to reduce your risk and costs

The White Oak Insurance Services team is an expert in providing insurance options for Georgians and can advise you on receiving the best and lowest cost protection for your home.

Ready to Ensure Comprehensive Coverage at the Best Rates? Let’s Connect!

Our dedicated team at White Oak Insurance Services is here to help you strike the perfect balance between robust home insurance coverage and affordable premiums. Reach out to us today to explore personalized solutions that safeguard your home without breaking the bank.

Manage and increase your deductible.

One approach to limiting your premiums is to manage your deductible. While self-insurance is often not practical for most people when it comes to their major asset (their house), you might be able to increase your deductible to reduce your monthly premium. Our Independent Insurance Agents can help advise on the right Home Insurance deductible for your situation in our Woodstock or Warner Robins locations.

Policy Bundle

White Oak can package your auto, travel, life, and home insurance to give you the largest overall discount. Often, discounts can reach even 20%.

White Oak Insurance Services specializes in all of the above areas and helps everyday people living in Georgia review their insurance.

Talk to us about how we can help you get the best Homeowners Insurance at the best rates in Georgia! We will help you understand the factors that affect your Homeowners Insurance so that you can make informed decisions when choosing your insurance policy and provider.

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