In recent years, homeowners across the country have faced unprecedented increases in homeowner’s insurance premiums, with rates doubling or even tripling from one year to the next. To prevent this kind of payment shock, I propose implementing a 25% annual cap on homeowner’s insurance premium increases. This cap would allow insurance companies flexibility to adjust based on costs, while protecting homeowners from drastic, unmanageable rate hikes.
Currently, laws prevent mortgage lenders from creating sudden payment shocks, and property tax increases are often limited year-over-year. However, there are no such restrictions on homeowner’s insurance, allowing companies to increase premiums as much as they see fit. This has left countless families vulnerable to steep, unexpected financial burdens with no recourse.
For instance, my own premium recently rose from $1,800 to $4,200 in a single year — a 133% increase. This change alone raised my monthly mortgage payment by $400, not only due to the premium itself but also from the resulting escrow shortage. For many families, a sudden $400 monthly increase is simply unaffordable, leading to serious financial distress.
Establishing a cap on annual homeowner’s insurance premium increases would bring much-needed stability to homeowners nationwide, helping them budget predictably and maintain their financial security. I urge policymakers to consider this cap as an essential step toward protecting homeowners and stabilizing the housing market.