It’s sticker shock for homeowners.
Families are paying higher prices for just about everything because of inflation, which struck across the country during the COVID-19 pandemic. The higher prices are relentless.
Now, it’s homeowners insurance.
At least one company asked state regulators for permission to raise rates by 93.4%, according to data obtained from the New Jersey Department of Banking and Insurance (DOBI).
Insurance companies are asking for the increases because of a combination of inflation, increasing home replacement value, higher building costs and “increased frequency of catastrophic events” such as severe weather events. It’s a national problem, said Dawn Thomas, the agency’s spokeswoman.
She said the agency has received “significantly” more rate increase requests in recent years.
Under state law, property and casualty insurers are permitted to file requests with the department to amend their rates or rating systems, Thomas said.
“The Department takes seriously its responsibility to regulate the insurance industry in a manner that promotes consumer protection and the stability of the industry,” she said. “All rate changes must be reasonable, adequate and not unfairly discriminatory.”
If the request is “unreasonable, inadequate or unfairly discriminatory,” it will not be approved, she said, noting that it blocked $68 million in homeowner premium increases since 2023.
But for the more than 120 hikes that were approved since 2023, homeowners’ pocketbooks are hurting.
The highest hike request came from Clear Blue Insurance, which is licensed to offer policies in all states except Alaska. After requesting a hike of 93.9%, it was granted a 20% increase. The company did not respond to requests for comment.
The second highest request was for a 34% increase from Palisades Property & Casualty, which is part of Plymouth Rock Assurance. It received a 14% jump. Next was Kingstone Insurance, which asked for a 28.4% hike and received permission to raise rates by 18.7%.
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The pain probably isn’t over yet. More homeowner insurance companies have filed requests to hike their rates, including a dozen that asked for double-digit hikes.
The highest pending request is for Allstate New Jersey Property & Casualty, which asked for a 36.9% increase. MIC General requested a 36% hike and Palisades Property & Casualty is seeking a 30.3% increase.
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If your policy is going up, shop around. While the cost increases are affecting the entire industry, you may find savings by making a switch.
You can find a list of companies that offer homeowners coverage in the state on theBanking and Insurance website.
Also read the Banking and Insurance Department’s Consumer Guide to Homeowners, Renters and Condominium Insurance.
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Karin Price Mueller may be reached at KPriceMueller@NJAdvanceMedia.com. Follow her on X at @KPMueller.
