Homeowners’ Insurance Premiums Have Been Getting More Expensive! Check Out The 10 States With The Highest Rates!

Homeowners’ Insurance rates have been on the rise for quite a while, specially Premiums. And signs point out that these numbers aren’t going down anytime soon. The average annual rate increased by 19.8% between 2021 and 2023, and a new report from Insurify predicts that the cost of home insurance will increase 6% in 2024, which would rise the average premium up to $2,522.

Due to a higher building costs and recent climate catastrophes, the premiums are facing higher rates. States that are vulnerable to coastal storms might experience double-digit percentage increases on the prices this year. It’s clear that home insurance, an essential part of buying a house – its policies protect your property against various issues, such as fire, theft, and weather damage -, is becoming harder for the majority of Americans to afford it.

What Are The Most Expensive States For Homeowners’ Insurance Premiums?

According to Insurify’s report, the largest increase is forecasted for Louisiana homeowners. Their premiums are projected to rise 23%, from an average of $6,354 to $7,809. These are the states that had the highest average annual rate of 2023 and how much it is projected to cost in 2024, for policy with $300,000 of dwelling coverage:

Florida

• 2023: $10,996
• 2024: $11,759

Louisiana

• 2023: $6,354
• 2024: $7,809

Oklahoma

• 2023: $5,444
• 2024: $5,711

Texas

• 2023: $4,456
• 2024: $4,437

Mississippi

• 2023: $4,312
• 2024: $4,482

Colorado

• 2023: $4,072
• 2024: $4,367

Nebraska

• 2023: $3,962
• 2024: $4,292

Alabama

• 2023: $3,939
• 2024: $4,281

Kansas

• 2023: $3,437
• 2024: $3,666

Arkansas

• 2023: $3,368
• 2024: $3,662

Why Is The Cost of Homeowner’s Insureance Premiums Rising?

Sources claim that there are some factors causing these higher rates, such as:

• Increased Frequency and Severity of Natural Disasters: climate change has led to more frequent and intense natural disasters, resulting in higher insurance payouts for companies. To offset these losses, they raise premiums;
• Rising Construction Costs: the cost of repairing or rebuilding a home has risen due to inflation and material shortages. This translates to higher potential payouts for insurers, reflected in premium hikes;
• Reinsurance Costs: reinsurance is insurance that insurance companies purchase to protect themselves from catastrophic losses. The rising cost of reinsurance is passed on to policyholders through higher premiums.

There are many other things that can impact the cost of your home insurance, so keep them in mind when making your decision:

• Location: one of the most significant factors impacting your premium is your property’s location. Homes situated in areas prone to natural disasters like hurricanes, tornadoes, or wildfires will typically have higher premiums compared to those in low-risk zones. States like Florida and Louisiana are notorious for having some of the most expensive homeowners insurance premiums due to their vulnerability to hurricanes;
• Dwelling Value: the value of your home directly affects your premium. A more expensive house translates to a higher potential payout for the insurance company in case of a claim, hence a steeper premium;
• Dwelling Coverage: the amount of coverage you choose for your dwelling structure also plays a role. Higher coverage limits naturally lead to higher premiums;
• Deductible: the deductible is the portion of the repair or replacement cost you’re responsible for before your insurance kicks in. Opting for a higher deductible lowers your premium but means you’ll shoulder a larger financial burden if you need to file a claim;
• Claims History: having a history of filing claims can significantly increase your premium. Insurance companies view homes with frequent claims as higher risk;
• Credit Score: in many states, your credit score can be a factor in determining your premium. Generally, a good credit score indicates financial responsibility and translates to a lower premium;
• Age and Condition of the Home: older homes or those in poor condition might require more repairs and replacements, leading to higher premiums;
• Additional Coverages: adding additional coverages like flood insurance or personal property replacement for high-value items will increase your premium.

How Can I Lower My Premium?

• Don’t blindly renew your policy with your current provider, get quotes from multiple insurers to ensure you’re getting the best rate;
• As mentioned earlier, opting for a higher deductible lowers your premium. However, choose a deductible you can comfortably afford in case of a claim;
• Homes with security features – like burglar alarms and deadbolt locks – are often eligible for discounts on premiums;
• Bundling your homeinsurance with your auto insurance can often lead to significant discounts;
• Taking good care of your property, such as regularly maintaining your roof and plumbing, can reduce the risk of future claims and potentially lower your premium;
• As your home’s value or your needs change, re-evaluate your coverage and adjust it accordingly. You might be able to reduce coverage for certain items or remove unnecessary add-ons.