Page 56 - BusinessWest February 17, 2025

The report draws data from more than 330 insurers and more than 246 million homeowners’ insurance policies. That data was collected through a first-of-its-kind effort by the National Assoc. of Insurance Commissioners, state insurance regulators, and FIO.
Among the report’s key findings:
• Homeowners’ insurance costs are rising quickly across the nation, although with significant variation by region and ZIP codes. Average homeowners’ insurance premiums per policy increased 8.7% faster than the rate of inflation from 2018 to 2022, according to the data analyzed. Some consum- ers faced substantially larger premium increases than the national average.
• Homeowners in communities affected by substantial weather events are paying far more than those elsewhere. From 2018 to 2022, consumers living in the 20% of ZIP codes with the highest expected annual losses to buildings from climate-related perils paid $2,321 in premiums on aver- age, 82% more than those in the 20% lowest climate-risk ZIP codes.
• Policy non-renewal rates also are higher in areas with the highest expected losses from climate-related perils. Con- sumers in the highest-risk ZIP codes faced higher policy non- renewal rates, with average non-renewal rates about 80% higher than those in the lowest-risk ZIP codes. Moreover, average non-renewal rates increased more in the highest-risk areas than in the lowest-risk areas over this period, which indicates that consumers faced decreasing availability.
Storm Brewing
In a recent article about insurance trends and changes in 2025, Lisa Eugin, manager of Marketing and Administration at Encharter Insurance in Amherst, noted that costs due to increased frequency of natural disasters will likely continue to impact homeowners’ insurance premiums.
“The climate-related disasters are so large that insurance companies will spread the increased costs across the entire
• Climate change is making it more costly for insurers to operate. Insurers’ costs in the 2018-22 period were higher in areas with the highest expected losses from climate-related perils. The paid loss ratio, which reflects how much insurers paid for claims relative to what they received in premiums, was highest in the highest-risk ZIP codes. These areas had
a higher frequency of claims and severity of claims, about $24,000 on average compared to an average of about $19,000 for lowest-risk areas.
LISA EUGIN
country, and this will affect us here in New England. Many companies will be introducing stricter underwriting guidelines or higher deductibles,” she wrote.
“In many cases, we may advise you to leave your policy with the current insurer to avoid a new company inspec-
tion with stricter guidelines leading to either cancellation or higher-than-expected pricing,” she added. “On a positive note, many insurers are expanding discounts for smart-home tech- nology, such as security systems and water-leak detectors, which help mitigate risk.”
Climate
Continued on page 23
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“The climate-related disasters are so large that insurance companies will spread the increased costs across the entire country, and this will affect us here in New England. Many companies will be introducing stricter underwriting guidelines or higher deductibles.”
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