The cost of homeowners insurance has been rising steadily in recent years, due to a number of factors, including more frequent and severe weather events, increasing construction costs, and legal liability concerns. As a result, more and more Americans are choosing to drop their insurance. According to a recent survey, 12% of U.S. homeowners do not have homeowners insurance. This is up from 9% in 2020. The survey also found that homeowners in lower-income households are more likely to be uninsured.
Reasons for dropping homeowners insurance
There are a number of reasons why homeowners are dropping their insurance. A few of the most common reasons are:
- Cost: The most common and obvious reason is that many homeowners simply can not afford the rising premiums.
- A major loss is unlikely: Others believe that they are unlikely to experience a major loss, and that the cost of insurance is not worth the peace of mind.
- Savings are enough to self-insure: Some homeowners believe that they have enough savings to cover the cost of repairs in the event of a loss.
Risks of not having homeowners insurance
There are a number of risks associated with going without insurance. For starters, if your home is damaged or destroyed, you will be responsible for the entire cost of repairs. You may also have difficulty getting a loan to rebuild your home if you do not have insurance. It should also be noted that if you have a mortgage, you face a secondary risk if they choose to go without an insurance policy. In these cases, you may have lender-placed insurance. This insurance is more expensive than average homeowners insurance and usually covers less.
Tips for shopping for homeowners insurance
- Shop around for quotes from different companies.
- Increase your deductible.
- Make sure you have the right coverage.
- Consider bundling your home and auto insurance.
- Take steps to reduce your risk of loss, such as installing a security system or making repairs to your roof.
A recent analysis by Bankrate.com found the average premium for $250,000 in dwelling coverage rose to $1,428 per year. This equates to a nearly 22% increase from 2022. If you are still struggling to afford insurance, you may be eligible for government assistance. The National Flood Insurance Program (NFIP) provides flood insurance to homeowners in participating communities. The U.S. Department of Housing and Urban Development (HUD) also offers a number of programs to help low-income homeowners afford insurance.
Are you thinking about buying or selling real estate in South Florida? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, don’t forget to download the free Florida Home Search app for your smartphone or tablet.