The number of Americans with home insurance has reached a historic low, as consumers increasingly choose to buy coverage in their own names.
But the trend isn’t slowing down.
And the numbers aren’t going to.
The latest home-insurance numbers released by the Federal Trade Commission show the median value of homeownership policies sold in 2018 was $250,000, down from $300,000 in 2017.
In 2018, more than a quarter of Americans purchased policies in their names, down by 11% from 2017.
That number is up from last year, when less than 3% of Americans were using their own homes to buy homes.
And the number of policies sold for under $1 million has increased, from 18,000 to 23,000.
“Home ownership has become a more popular choice for millions of Americans, but the number and quality of policies being sold has fallen behind the growth in home ownership,” said FTC Chairwoman Edith Ramirez in a statement.
The average cost of a policy has also declined.
For instance, a $150,000 policy for a home in a metropolitan area can cost $8,000 less than a similar policy for the same price in a rural area, according to the FTC.
Homeowners are also buying more policies in bulk.
The average cost for a policy sold in 2017 was $3,000 and for 2018 it was $2,000 more.
This is good news for consumers because it means the average policy is more affordable.
But some experts warn it could put a damper on home-buying plans, especially for people with high debt loads.
Some homeowners are now choosing to sign up for their own policy, which could increase the risk of being charged higher rates, said Robert Miller, president of Miller Wealth Management in New York.
Home insurance rates will likely be higher in the years ahead, Miller said, but “there’s still a lot of room for improvement.”
The average policy cost dropped to $3.5 million in 2018 from $4.6 million in 2017, but that was still well below the rate that many of these consumers were using to buy their homes.
But consumers should be wary of what policies they buy, Miller warned.
“If you’re looking to purchase a policy, make sure you’re not signing up for something that’s only going to cost you so much more.”
The FTC said in a news release that consumers should also avoid buying policies in an individual’s name.
That could mean that they’re signing up with someone else, and that they have a policy in their name that’s not covered by the policy in question.
“Don’t be afraid to call the agent and inquire about the policies you’re considering buying,” said Christina Bautista, director of the FTC’s Bureau of Consumer Protection.