Triple-I Report — The Whys Behind Skyrocketing Homeowners Rates

Homeowners insurance rates are rising. In some states, like California, they are skyrocketing and are, in many cases, unaffordable.

The Insurance Information Institute (Triple-I) just released a report explaining what most of us already know. Issues Brief, Trends and Insights: Drivers of Homeowners Insurance Rate Increase says driving the rising rates is still rising inflation followed by the increasing cost of supplies that is driven by supply chain issues.

Lastly, comes the abuse of the legal system.

Triple-I CEO Sean Kevelighan, CEO of Triple-I said the increase in construction materials between 2020 and 2022 rose, on average, 55%.

“Much like Americans are experiencing higher prices for virtually all material goods, a key driver for homeowners insurance has been around the likes of construction materials, which are an important element used when insurers help customers rebuild after catastrophe strikes,” Kevelighan noted.

Natural disasters are growing in frequency and intensity and from the 1980s to the 2020s, losses have increased tenfold.

Kevelighan also pointed to legal system abuse and noted that attorneys hustling business with their names on billboards are encouraging litigation first instead of going through other means to settle a claim.

That, and the shiftiness and lack of transparency in third-party litigation funding is a big concern. This has become a multibillion-dollar industry.

The Triple-I says the insurance industry continues to struggle with profitability and with the net combined ratio of 110.9 in 2023, had the worst underwriting results the business has seen since 2011.

For every dollar in income last year, insurance companies paid out an average of $1.11.

Source link: Insurance Business America — https://bit.ly/3M9Gizs