A recent report by Verisk Analytics, a multinational data analytics and risk assessment firm, states that property replacement costs in the U.S. increased significantly (5.2%) from July 2023 to July 2024. Given that these costs had increased 4% the year prior, property owners are now facing even higher premiums while insurers face greater challenges in managing risk.
The Verisk report noted two anomalies:
Commercial replacement costs increased by 5.5%, while residential replacement costs rose by 4.9%. Commercial property sizes and scope account for much of this difference, increasing the costs of materials and labor exponentially.
The growth rate of combined hourly retail labor costs actually decreased from 6.2% to 4.3% YOY, meaning in most markets, construction material costs are driving the increase in replacement values.
How Is This Affecting Me?
Here are some statistics that will help you understand these shifting premium rates:
Prior to the pandemic, homeowners typically experienced an annual rate increase of 2 to 3% due to the increasing risks from severe weather events.
The average cost of insurance for U.S. homeowners in August 2024 was $2,511, compared to $2,450 in August 2023.
In Virginia, the average homeowners premium in August 2024 was $2,197, compared to $2,127 in August 2023. These premiums are based on dwelling value, or the cost to rebuild your home.
Insurance premiums are predicted to increase above the average annual 2-3% for the next 2 years.
Although average home insurance costs by state can help you get an overview of rates, cities face more specific risks that can affect local rates. Below is a breakdown of average insurance costs based on a home’s value in Virginia's larger metro areas*:
City | $250K | $350K | $450K | $750k | $1M |
Charlottesville | $1,345 | $1,644 | $1,991 | $3,042 | $3,972 |
Culpeper | $1,467 | $1,800 | $2,180 | $3,339 | $4,357 |
Danville | $1,597 | $1,962 | $2,385 | $3,651 | $4,756 |
Fairfax | $1,359 | $1,671 | $2,021 | $3,070 | $4,007 |
Fredericksburg | $1,431 | $1,751 | $2,122 | $3,248 | $4,243 |
Lynchburg | $1,460 | $1,786 | $2,167 | $3,322 | $4,340 |
Norfolk | $2,291 | $2,849 | $3,448 | $5,256 | $7,026 |
Richmond | $1,637 | $2,021 | $2,461 | $3,794 | $4,954 |
Roanoke | $1,404 | $1,723 | $2,083 | $3,173 | $4,132 |
Staunton | $1,385 | $1,698 | $2,053 | $3,315 | $4,094 |
Virginia Beach | $2,552 | $3,154 | $3,806 | $5,872 | $7,691 |
Winchester | $1,416 | $1,736 | $2,099 | $3,208 | $4,183 |
Mutual Assurance Can Help You Save On Your Home Insurance Over The Life of The Policy
When you get your first-year quote from Mutual Assurance, it is sometimes higher than what you may get from other insurance providers. This is because we do a thorough inspection of your home and take into account the finishing touches (like marble or quartz countertops and crown molding), the appliances and mechanics, and many other things that reflect the most accurate assessment of your home and personal property values. Other insurance providers often only estimate the cost of replacing your home and could miss some of the improvements or special touches you have inside.
After the first year, while others are paying the full premium on their coverage, Mutual Assurance members pay a small percentage of that figure. That rate currently sits at 22%. So if you have a $450,000 home in Staunton and your premium with another carrier is $2,053, that’s what you’ll pay.
Let’s say your premium with Mutual Assurance is $3,000 because we know you have beautiful woodwork in your interior. With our perpetual policy, you’d only pay $660 for your coverage. That’s a savings of $1,393. Even if your premium with Mutual Assurance is $1000 more, you’d still save $1,381.
With homeowners insurance costs increasing, if you are not already a mutual assurance customer, see if your home qualifies for our unique, personalized, and complete coverage. Let's start that conversation.
Click here for an online estimate, or call us at 800-648-1794.
Market Watch, Business Wire, AP, iii.com, Forbes
*To find the average homeowners premium in your city, visit The Average Cost of Homeowners Insurance in August 2024 (marketwatch.com)
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