Home insurance carriers in Maine raised rates by almost 15% on average so far in 2024, after years of single digit increases. And last year, home insurance rates went up 10%, according to state data.
Rate hikes are a reaction to recent punishing storms across the state. And insurers have gauged the likelihood of more intense weather in the future, as the effects of climate change accelerate, said Bob Carey, superintendent of the Maine Bureau of Insurance.
“Storms are more frequent, they’re more severe, there’s wider spread damage, so insurers have to price for that. It’s a risk transfer essentially,” Carey said.
But climate change isn’t the whole picture.
More expensive insurance is also driven by growing home values and higher costs for building materials and labor. And not every insurer has asked to increase rates, Carey said.
Maine is expected to see the second highest increase in home insurance rates in the country this year, according to a projection from online dealer Insurify. The report was quoted in a Maine Climate Council report this week about the impacts of a warming world on the state.
Insurify’s analysis estimates that more than a quarter of Maine insurers will request an increase for home policies and the average annual payment could go up nearly 20% to around $1,570 a year.
Chase Gardner, Insurify’s data insights manager, said even though home insurance in Maine is still inexpensive compared to other states and relatively less risky, recent storms made insurers pay attention.
“The risk there is increasing pretty substantially over the past couple years, both in future risk and also real, realized natural disaster damages,” Gardner said.