Farmers, USAA Lead Pack in Hiking Homeowners Insurance Rates in 2023: S&P

Farmers Insurance Group of Cos. and United Services Automobile Association (USAA) have increased homeowners insurance rates by nearly 15% each to lead all other insurers.

According to S&P Global Market Intelligence‘s RateWatch application, Farmers’ year-to-date calculated effective rate change on homeowner policies through Sept. 1, 2023 was up 14.8% – just a tick higher than USAA’s 14.7% rate hikes thus far in 2023.

“Macroeconomic conditions continue to plague US personal lines-focused insurers as the past two years have seen a higher-than-average rise in homeowners’ insurance rates,” S&P said. “Between 2018 and 2021, the countrywide yearly average change was in the 3% range but jumped to about 6% in 2022. Through roughly the first eight months of 2023, the national average rise in homeowners’ premium rates was 8.8%.”

Farmers has received approval to increase rates across 43 states, with an average hike of more than 10% in 28 states. S&P said the insurer’s three largest effective rate increases were in Illinois, Texas and Tennessee, at 25.3%, 25.1%, and 23.8%, respectively.

Meanwhile, USAA has raised rates in 44 states through Sept. 1, highlighted by a 36.6% effective rate change in Arizona, which saw insurers increase rates the most of any other state – a weighted average of 18.4%, S&P said. Texas was second-highest, with a 16.4% increase.

USAA also increased rates by more than 30% in two other states — Colorado and Tennessee.

Progressive Corp. has the largest year-to-date effective rate change in any state among the country’s largest homeowner writers with an uptick of about 57% in North Carolina that went into effect June 19 for renewals. Progressive was also approved to hike rates by a weighted average of 25% in California.

The states with the lowest weighted average increase by insurers so far in 2023 are Hawaii, Vermont and New Jersey at 1.8%, 2.5% and 2.8%, respectively.