Farmers Insurance Group of Cos. and United Services Automobile Association led the pack among the largest US homeowner insurers increasing premium rates in 2023.
Both of the insurers’ year-to-date calculated effective rate change on their owner-occupied homeowner policies were up by double-digits through Sept. 1, with Farmers’ 14.8% increase only slightly higher than United Services Automobile Association (USAA)’s 14.7% gain, according to S&P Global Market Intelligence’s RateWatch application.
So far, Farmers has received approval by state regulators to boost its rates across 43 states, with 28 of them having a calculated weighted average change of greater than 10%. The California-based insurer’s three largest effective rate increases occurred in Illinois, Texas and Tennessee, at 25.3%, 25.1%, and 23.8%, respectively.
USAA raised rates in 44 states through the first eight months of 2023, with about 60% having a double-digit calculated effective rate increase. The 36.6% effective rate change in Arizona is the largest for the Texas-based insurer. The insurer raised rates by over 30% in two other states — Colorado’s effective rate change was 34.7% and Tennessee’s was 30.1%.
The Progressive Corp. has the largest year-to-date effective rate change in any state among the country’s largest homeowner writers. An overall rate change of about 57% in North Carolina went into effect on June 19 for its renewal business. The insurer also received a notable increase in the battered California market when the state’s regulator approved a 25% weighted average increase. The filing was approved Aug. 9 and impacts about 41,600 policyholders.
The Ohio-based insurer’s countrywide calculated rate increase is 9% so far in 2023.
Arizona rises above the rest
The largest homeowner insurers in Arizona have collectively boosted their rates by a weighted average of 18.4% through Sept. 1, the highest calculated increase in the US. A 16.4% change in Texas was the second-largest increase, followed by a 16.3% rise in Illinois. In total, 12 other states have seen a double-digit increase in their homeowner rates.
The states with the lowest weighted average increase so far in 2023 are Hawaii, Vermont and New Jersey at 1.8%, 2.5% and 2.8%, respectively. The District of Columbia is also at the low end of the spectrum with a 2.3% calculated increase.
2023 rise in rates continues from prior year
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. Between 2018 and 2021, the countrywide yearly average change was in the 3% range but jumped to about 6% in 2022. Through roughly the first eight months of 2023, the national average rise in homeowners’ premium rates was 8.8%.