The Rising Cost of Home Insurance and What You Can Do

Insurance costs and their impact on the housing market had rarely been a major focus.? When we discussed affordability, we typically focused on mortgage rates and supply and demand, but insurance was always seen as a fixed expense.

That is no longer the case. CoreLogic data reveals that the percentage of mortgage borrowers paying more for taxes and insurance than for their principal and interest has surged from 2% a decade ago to nearly 10% today.

One of the primary reasons for this surge is the growing number of insurance claims due to extreme weather events. In 2024, the U.S. experienced 27 weather and climate disasters, each causing over $1 billion in damages—making it the second-highest total for any year on record.

This also marked the 14th consecutive year in which the country saw at least 10 billion-dollar disasters and the fifth straight year with 18 or more such events. Between 2015 and 2024, the U.S. recorded 190 separate natural disasters with losses exceeding $1 billion, according to data from the National Centers for Environmental Information.

As the frequency and intensity of these disasters continue to rise—along with the increasing costs of rebuilding and insurance—homeowners insurance is becoming a growing concern for both real estate professionals and consumers.

The Impact of Hail Damage on Roofs and Home Insurance Premiums

Illinois is among the top states for hail damage claims, and with climate patterns shifting, the frequency of severe hailstorms has only increased. In 2023 alone, the Midwest saw some of the most expensive hail-related insurance claims in history, with some storms causing billions of dollars in property damage.

When a homeowner files a claim for hail damage, their insurance company often raises premiums in subsequent years, citing increased risk. In some cases, insurers may even refuse to renew policies or require homeowners to upgrade their roofing materials to impact-resistant shingles. Additionally, homeowners who file multiple claims may be forced to accept higher deductibles or switch to policies with limited coverage for future hail damage.

The burden of these rising costs has left many homeowners feeling trapped. Some opt to pay for roof repairs out of pocket rather than file a claim, hoping to avoid higher premiums. Others find themselves forced to accept inferior insurance policies that provide less comprehensive coverage, leaving them vulnerable to future storm damage.

Steps Homeowners Can Take to Manage Rising Insurance Costs

While homeowners cannot control the weather, there are steps they can take to mitigate the financial impact of rising insurance costs:

• Upgrade Roofing Materials: Many insurers offer discounts for impact-resistant roofing materials designed to withstand hail damage. Investing in high-quality materials may help lower premiums in the long run.
• Bundle Policies: Homeowners may be able to save money by bundling their home and auto insurance with the same provider.
• Increase Deductibles: Choosing a higher deductible often reduces monthly premiums, though it means paying more out of pocket in the event of a claim. You might be very surprised at the savings by raising your deductible to $1,000 or higher.
• Shop Around for Insurance: Comparing rates from multiple insurers can help homeowners find more affordable coverage options.
• Regular Roof Inspections: Proactively maintaining and repairing the roof can prevent minor damage from becoming severe, potentially reducing the need to file claims. There are several affordable methods that can add several years to the roof’s life.

As insurance premiums continue to climb, homeowners must take proactive steps to manage their costs so the dream of homeownership in these suburban communities can still be reality.