Cost of Homeowners Insurance Has Gone Up In All 50 States

14 Nov

Climate change has increased the number of natural disasters in the last decade and that is impacting homeowners insurance rates according to a new report by QuoteWizard.

Data from the Insurance Information Institute shows that there were 850 natural catastrophes across the world  in 2018, which is a big jump from the 740 in 2017. In 2009, there were only 500. Natural disasters cause a tremendous amount of damage and in some years, damage has totaled over $350 billion in insured losses.

Insurance companies have found themselves struggling to keep up with claims and this is resulting in skyrocketing premiums in some states. If you live in a state that is prone to natural disasters such as tornadoes, hurricanes or wildfires, there is a good chance you will be paying more for homeowners insurance in the near future, if your aren’t already.

A recent QuoteWizard analysis found that in Oklahoma (very tornado prone), homeowners have seen their rates jump up a shocking 78 percent since 2007. This translates into an average increase of $821, not exactly chump change. The report found that the average homeowner in Oklahoma is now paying over $1,800 for homeowners insurance which is well above the $1,054 they paid only 10 years ago. 

Prices Going Up in All States

The cost of homeowners insurance has gone up in all 50 states but the rate jumps vary dramatically, mainly due to the frequency and severity of natural disasters. Increases ranged from a budget crushing 78 percent increase in Oklahoma to a mere 7 percent increase in Nevada. 

Roughly two thirds of all homeowner insurance losses come from wind, hail or water damage and midwestern states often bear the brunt of major storms. All of these storms and damage result in insurance claims and insurance companies pass those costs on to customers via high premiums. 

Oklahoma managed a first place showing in the ever rising cost of homeowners insurance mainly due to the 192 natural disasters the state has seen since 1955. This is by far the most any other state has seen except California which has experienced 313. Oklahoma tends to get hard with tornadoes and hailstorms that can cause significant, and expensive damage.

The Top Three

Here are the top three states when it comes to homeowner premium increases according to the QuoteWizard analysis:

Oklahoma: As mentioned, severe weather is the big reason this state has seen a 78 percent increase. Insurance premiums went from $1,054 in 2007 to $1,875 in 2016.

Kansas: Kansas, just north of Oklahoma, grabbed the second place spot, mainly because they are hit by the same weather that Oklahoma deals with every year. Rates have jumped 71 percent from 2007 to 2016 which breaks down to about $644 a year. 

Tornadoes are a big issue here with three of the 10 strongest tornadoes in history hitting Kansas. This includes the 2007 Greensburg tornadoes that did an estimated $268 million in damages.

Colorado: The Centennial State has watched Colorado homeowners insurance rates go up roughly 75 percent from 2007 to 2016. This translates into a $620 increase and local experts blame increasing natural disasters for the increase. Hailstorms, wildfires and tornadoes are the main culprits in pushing up rates. 

Fires have become a real issue in Colorado as the2012 Waldo Canyon fire, and the 2013 Black Forest fire highlight. These two fires caused over $850 million in insured losses. In addition to natural disasters, a shortage of construction workers has pushed up the cost of claims, and those additional costs result in higher premiums for everyone. 

A Few Tips to Lower Your Premium

Regardless of whether or not you live in a state that has seen major premium increases over the last decade, there are a few things you can do to lower your premium:

  • Shop Around: This is often the best way to lower your premium. Insurers rate risk differently which can result in dramatic differences in premium quotes. Shop your insurance annually and get quotes from at least five major insurance companies.
  • Update Your Home: If you live in a storm prone area, upgrading certain parts of your home can result in big discounts. Adding storm shutters, an impact resistant roof or even a sprinkler system can all drastically lower your insurance costs. Check with your agent or insurance company to see which upgrades will result in the biggest discount.
  • Up Your Deductible: This is another great way to save money. Insurance companies love it when you have more skin in the game so if you can afford to double your deductible you should save a significant amount of money. Always choose a deductible that you can easily afford in case you have to make a claim.
  • Ask for Discounts: Insurers offer all kinds of home insurance discounts so make sure you are getting all discounts that you are qualified to receive. Have your agent do a discount review to make sure all available discounts are applied to your premium.

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