Homeowners Insurance Costs Are Soaring — and Insurers Are Dropping More Customers

Our take

While this report covers the US market, South African homeowners and buyers should take note — the underlying pressures are not unique to America. Locally, short-term insurers have been steadily repricing property cover upward, driven by a combination of load-shedding-related fire and surge claims, rising building material costs (worsened by rand weakness), and increasingly severe weather events like the KwaZulu-Natal floods. For SA buyers, especially first-time buyers stretching their budgets, building insurance is a non-negotiable condition of most home loan approvals — so rising premiums directly affect affordability calculations. Landlords operating buy-to-let portfolios need to factor insurance cost escalations into rental pricing reviews, particularly as the Rental Housing Act limits how and when increases can be applied. The broader lesson from the NAIC data: insurers globally are reassessing climate-linked risk, and SA properties in flood plains, fire-prone areas, or coastal zones may face similar non-renewal pressure in coming years. Buyers and owners should review their cover annually, compare quotes, and ensure their sum insured reflects current replacement — not purchase — value.