Homeowners insurance costs up 23% compared to last year

COLUMBIA, Mo. (KMIZ)

Some Missouri residents residents this year may have noticed a change in the cost of their home insurance.

Data from Bankrate shows the cost of insurance is increasing across the country, including in Missouri.

As of March 1, the national average cost of homeowners insurance was up 23% compared to rates in 2023.

The national average is $1,759 per year, or $147 a month, for a policy with $250,000 in dwelling coverage. Missouri’s rates are slightly higher than the national average at $1,854 per year, or $155 a month.

A spokesperson for the American Property Casualty Insurance Association, Nicole Ganley, said costs have gone up because of inflation, litigation abuse and increased construction costs. She said construction costs are up more than 40% and labor costs are up over 30%.

“The costs to rebuild or repair a home have gone up, unfortunately, and that impacts how much insurance has to pay out,” Ganley said. “So, it is driving up premiums, and it is a national trend that we’re seeing.”

Ganley said in case of a widespread event, such a hail storm, people should opt for extended replacement cost coverage instead of actual cash value. Actual cash value will give someone 100% of coverage while extended replacement cost will give 150%, which can help during a demand surge.

“If you have a 10-year-old couch, (actual cash value) is going to replace a 10-year-old couch,” Ganley said. “Whereas, replacement cost, if you have a 10-year-old couch, you’ll have more coverage and you’ll have enough to buy a new couch.”

The ABC 17 Stormtrack Weather Team is calling for strong storms Wednesday night into Thursday, with the possibility of up to tennis-ball-sized hail in some areas.

Callaway County resident Mike Boessen has eight roofs on his property and said last year’s hail storm in March caused around $27,000 in damage. But, he won’t be paying a cent thanks to his insurance coverage.

“I learned my lesson eight years ago, when hail took out our roofs, and that is buy full replacement insurance,” Boessen said. “It’s not that much more … so I was really glad I had it this time because I had to replace every roof.”

He said eight years ago, a hail storm caused damage to his property and he had to pay almost $8,000 out of pocket. That’s when he decided to switch to full replacement insurance.

He said another piece of advice is to hire a good contractor. While his roofs have been repaired since the 2023 storm, he is still waiting on his contractor to fix damage to gutters, screens and windows almost a year later.

“Usually you pay like 50% up front, don’t give them another cent until the job is done, because that’s why I’m sitting here for a year and half later,” Boessen said.

State Farm Insurance released new data on Wednesday showing Missouri was the fourth-highest state for hail damage claims in 2023. The state had 2,185 hail claims throughout the year.

Nationally, State Farm says it paid $6.1 billion for hail claims in 2023. That is up from 2022, when it paid $3.3 billion.

Both State Farm and Ganley said it’s important for people to pick up the phone and call their insurance agent for an annual financial update and make sure their policy is up to date.

“It’s really easy if you’re a homeowner, you get your insurance when you’re in escrow and then you just forget about it for ten years, but that’s not a good way to operate anymore because things are changing,” Ganley said.

Along with extended replacement cost, Ganley said people need to make sure they have inflation guard to keep up with inflation and building code upgrade.

She said people can also save money on insurance policies by asking their agent about any available discounts and bundling insurance policies.