Home Insurance Rates Surge Nearly 15% at Farmers, USAA — Study

The average home insurance rate climbed 8.8% in the first eight months of 2023, report shows.

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(Image credit: PM Images, Getty Images)

Farmers Insurance Group and the United States Automobile Association (USAA) increased home insurance premiums by nearly 15% this year, higher than all other major insurers, according to a recent report.

The national average hike in homeowner premium rates was about 8.8% through August, according to the October 3 S&P Global Market Intelligence report.

Through September 1, the owner-occupied homeowner policies of Farmers and USAA posted year-to-date effective rate increases in the double digits, S&P said. Farmers lead the way with a 14.8% increase, narrowly exceeding USAA’s increase of 14.7%.

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Neither Farmers nor USAA responded to Kiplinger's requests for comments.

While most states are seeing significant rate increases, others are seeing insurers completely pull out following devastating weather events, Kiplinger previously reported. Earlier this year, for example, both AAA and Farmers abandoned home and auto coverage in Florida and State Farm stopped business and personal property coverage in California.

According to the S&P report, Farmers raised rates across 43 states, about 65% of which had a calculated weighted average change of more than 10%. This includes effective rate hikes of 25.3% in Illinois, a 25.1% in Texas and a 23.8% in Tennessee.

USAA increased rates across 44 states, about 60% of which had a calculated weighted average change of more than 10%, S&P said. This includes a whopping 36.6%  effective rate increase in Arizona, 34.7% in Colorado and 30.1% in Tennessee.

Progressive recorded the largest year-to-date effective rate change in any state over the first eight months of 2023 with a 57% increase in North Carolina, S&P said. The increase became effective on June 19 for the company's renewal business.

Macroeconomics at play

“Macroeconomic conditions continue to plague US personal lines-focused insurers as the past two years have seen a higher-than-average rise in homeowners insurance rates,” S&P said. “Between 2018 and 2021, the countrywide yearly average change was in the 3% range but jumped to about 6% in 2022."

Homeowner insurance is required by most mortgage lenders and is typically included in your mortgage payment. It is designed to protect both you and the lender. There are several ways to help you save on your policy, including bundling your homeowners insurance with your auto policy as well as taking advantage of discounts, such as paperless documents.

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Joey Solitro

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.