Survey: 12% of U.S. homeowners don’t have property insurance. About half of them have household incomes of $40,000 or less and say they can’t afford it.
NEW YORK – Policyholders increasingly opt out of homeowners insurance as premiums become unaffordable.
Bankrate found the average premium for $250,000 in dwelling coverage rose to $1,428 per year – a nearly 22% increase from 2022.
Wealthier homeowners say they have enough savings to rebuild if a natural disaster damages or destroys their home – but experts say they may be in for a surprise. They’ll need more than just home rebuilding costs and money to replace contents. They’ll also have to cover the cost of debris removal.
“It is a risky proposition to go without home insurance, and you need to fully understand the financial consequences if you lose your home,” says financial adviser Noah Damsky.
Over the past three years, Executive Director Amy Bach at United Policyholders says she’s seen more people who own their homes outright or inherited a home drop insurance because they can’t afford or can’t accept the current high price of home insurance.
Still, other policyholders are forgoing insurance coverage because their carrier didn’t renew their policy due to increased catastrophe risks.
According to a 2023 survey by the Insurance Information Institute and Munich Re, homeowners with a mortgage face a secondary risk if they choose to go without an insurance policy: lender-placed insurance, which is more expensive than average homeowners insurance and usually covers less.
Source: Wall Street Journal (08/28/23) Dagher, Veronica
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