Is home insurance worth it? Examining the pros and cons - ET Edge Insights (2024)

FAQs

Is homeowners insurance worth the money? ›

Even if you don't have a mortgage, homeowners insurance may still be worth the cost. Natural disasters, theft and other unanticipated risks can result in thousands of dollars in repairs, replacements and even lawsuits. Homeowners insurance helps offset those costs, greatly reducing what you'd pay out of pocket.

Will homeowners insurance go down in 2024? Unfortunately, home insurance rates will continue to soar in 2024, according to Insurify's analysis. Annual home premiums are expected to jump by an average of 6% nationally, from $2,377 to $2,522. The rate hikes are projected to reach as high as 23% in some states.

State Farm is the largest home insurance company in the U.S. The company collected close to 18% of dollars spent on homeowners insurance premiums in the country — double that of its closest competitor. State Farm provides auto, home and property, small business, life, health, disability and pet medical insurance.

Of those who go without insurance, nearly half make less than $40,000 a year. And with coverage getting a lot more expensive — especially in disaster-prone states like Florida and California — people are struggling to afford it.

Why did your homeowners insurance go up? (Updated May 2024) The increase in expensive natural disasters and higher-than-average labor and construction costs have caused home insurance rates to skyrocket.

As inflation increases, insurance companies respond by raising rates. That's because the cost of items in your home will cost more than they did last year. As the price for appliances and equipment escalates, rates will adjust as well.

Inflation is partly to blame for those big payouts. The cost of fixing or replacing damaged homes and cars has jumped sharply in recent years as a result of rising labor and material prices.

Based on J.D. Power's home insurance ratings, Erie Insurance is named the best home insurance company for customer satisfaction. It has the highest score, 856 out of 100, followed by Amica and Auto-owners.

The auto insurance company with the most complaints is United Automobile Insurance, which receives roughly 40 times more complaints than the average insurer its size, according to the latest NAIC complaint index. The insurance companies with the next most complaints are Ocean Harbor Insurance and California Casualty.

Filing a home insurance claim isn't always the best option and should be reserved for times when repairs will cost significantly more than your deductible, your loss is covered by your policy and you haven't filed other claims in recent years.

What would happen if a homeowner had no homeowners insurance? ›

Possibly Losing Your Home

If you're paying a monthly mortgage, you probably have no choice but to pay for homeowners insurance. If your mortgage lender requires it and discovers your home isn't insured, it could initiate foreclosure, resulting in the loss of your home.

You should have homeowners insurance during the entire time you own a home. If you're buying a new home, you should set up your insurance to be effective from the time you close on the home. And if you're selling, you should make sure not to cancel your policy until after the closing.

Unfortunately, paying off your mortgage doesn't reduce homeowners insurance premiums. You will no longer be required to carry home insurance as it isn't legally mandated, but your home will still require the same level of coverage to protect you from financial losses.

Make sure you're covered for the right amount – your home insurance policy should cover the full value of your home in case of damage or destruction. When it comes to home insurance, you want to make sure you're getting the right amount of coverage.

Homeowner's insurance pays for losses and damage to your property if something unexpected happens, like a fire or burglary. When you have a mortgage, your lender wants to make sure your property is protected by insurance. That's why lenders generally require proof that you have homeowner's insurance.

You should have homeowners insurance during the entire time you own a home. If you're buying a new home, you should set up your insurance to be effective from the time you close on the home. And if you're selling, you should make sure not to cancel your policy until after the closing.