Most homeowners are concerned they will be unable to afford insurance on their residences, according to a new survey released by Realtor.com.
The survey found 88% of respondents fearing they will pay for more homeowners insurance in the future while 42% confirmed they have experienced a rise in home insurance costs. Looking ahead, 75% of respondents believed homeowners insurance could ultimately become unaffordable and 58% of recent and prospective homebuyers said that they would or are likely to forgo homeowners insurance if the costs became too high.
According to the survey’s findings, insurance challenges have forced one-third (33.7%) of home searchers to change the geographic area where they are looking for a home and another 30% have cast a wider net and expanded their initial target geography. However, only 30% of respondents said they looked at the natural disaster risk data for their home or prospective homes, though 44% plan to do so in the future.
“Homeowners insurance offers financial protection for consumers that may help cover damage to homes and personal property from an extreme weather event or fire, while also providing personal property and liability coverage,” said Realtor.com Chief Economist Danielle Hale. “But these benefits come with an upfront cost that has risen as weather events have become more frequent and impactful and rebuilding costs climb. Homeowners are looking for strategies to lower costs including adjusting their home searches and potentially short-charging or forgoing coverage altogether.”
The survey polled 1,000 adults from Aug. 7-8, and all respondents indicated that they are currently interested in buying or selling their primary residence or have done so within the past two years.
I think the insurance companies should not be able to charge us for replacement value unless we agree. It should be for what we owe on our mortgage. I owe $160,000 and market for my house is about $400,000 but the insurance I am required to pay is for replacement of $650,000. I am on a fixed income and am being forced to consider selling since the insurance is so high. I should be able to choose which rate I want to pay. As long as the mortgage company is paid what they owe, it shouldn’t matter.