Skyrocketing Premiums Are Hitting Homeowners Hard, But Barely Factor Into Inflation

Florida insurance crisis

Insurance rates have been climbing for a number of reasons: Storms have become more frequent and severe, inflation and labor shortages have driven up the cost of repairs and home values have increased, requiring larger policies. The biggest jumps occurred in Texas, Arizona and Utah, which were among 25 states in total that posted double-digit surges last year. In some places, including Florida, rates are up more than 40 percent over the past five years.

The Hidden Driver of Soaring Home Insurance Costs

Reinsurance and high cost of homeowners insurance

One leading, but little-discussed, cause of this coverage crunch: a big increase in the cost of reinsurance policies. Now all eyes are on a round of reinsurance renewals currently under way in Florida and elsewhere that will help determine whether more premium increases are in store for homeowners.