Home insurance policies skyrocket across the state

By Cameron Montemayor

Residents looking to purchase or renew their home insurance policy this year could be in for sticker shock.

The average annual homeowners insurance policy has increased in Missouri by nearly 20% on average since 2021, according to insurance marketplace data from QuoteWizard.

Residents and businesses across the area are seeing increases from a few hundred dollars to more than a thousand dollars, especially for those with underinsured property.

Clinton County resident Steve Erickson has seen his insurance — both homeowners and auto — increase across the board between 20% and 30% in the last year.

“That’s why so many go without auto insurance or home insurance because they can’t afford the dang thing,” Erickson said. “It’s a boatload for everybody.”

At $2,692 per year, Missouri currently has the ninth-highest average annual home insurance policy in the U.S. for a home with a dwelling coverage amount of $250,000, according to April data from MarketWatch.

Missouri’s average is nearly 7% higher than the national average ($2,511) or roughly $181 more per year. The average annual U.S. policy has increased by 30% from 2023, according to financial research company Bankrate.

“A lot of people have said this is the hardest market they’ve seen,” said Bill McMurray, a property casualty insurance underwriter with Stroud Insurance Group.

In some cases, he’s seen commercial policies increase by more than $1,100 in St. Joseph.

Massive industry-wide losses in surplus — which are used to pay out claims — are causing companies to pass the cost to customers and increase premiums. The insurance and property casualty industry as a whole suffered historic losses of $38 billion in 2023, a result of several factors, notably severe weather, home replacement costs and high claim payouts.

Losses from severe weather such as hail, tornadoes, thunderstorms, flooding and wildfires were almost double the annual average figure. Severe thunderstorms in the first half of 2023 alone accounted for 68% of losses, a frequent occurrence in St. Joseph and Northwest Missouri.

“It’s both a frequency and severity problem. I mean, we have a lot of weather-related claims in our area,” McMurray said. “Every company I think in this country is increasing rates or pulling out of markets or adding deductibles or doing all of the things they can to put a little more money in the sock so they can pay claims.”

Home replacement costs have increased by nearly 55% since 2019. Those costs are set to increase by anywhere from 3% to 6% in 2024, according to a report by Currie & Brown, a leading construction and cost-management consultant.

Insurance increases aren’t just affecting residential and commercial property policies; auto policies are rising at a significant pace.

St. Joseph resident Galen Mairs has been a loyal customer of his insurance company for nearly 60 years, but consistent increases to his policy over the last few years have forced him to consider shopping around for other options.

“Back in the old days when your car got older, your insurance actually went down,” Mairs said. “Now, no matter how old it is, it goes up.”

McMurray said insurance and market industry conditions are making it all the more important for customers to carefully review their policies and deductibles so they can explore options to minimize the impact of increases as much as they can if they do occur.

“You might be underinsured on your homeowners because of the price of materials going up,” he said. “You don’t want to take a penalty on a loss because you’re underinsured.”

He said that despite insurance industry challenges, several companies are projecting improvements in underwriting losses by the third or fourth quarter of 2024, which could alleviate policy increases for millions of Americans.