Home Insurance Rate Increases
If you feel like your homeowners insurance premium is always headed up, you may be right. In fact, a recent study found that homeowner insurance rates have risen in every state over the last decade and if you live in the Midwest, those rate increases have been fairly dramatic.
While rate increase vary by state, one of the main culprits that is pushing up premiums is the increased severity and frequency of natural disasters. As tornadoes, hurricanes and fires happen more often and grow in strength and scope, insurance companies are often left paying to repair the damage. These losses are passed onto customers via higher premiums.
Industry statistics show that roughly two thirds of homeowner insurance claims come from hail, wind and water damage which has led to many Midwestern states seeing premium increases of 75 percent or more over the past decade.
Rate Increases by State
Every year The National Association of Insurance Commissioners (NAIC) puts out a report which includes the average home insurance rates for every state. The data is based on a HO-3 policy which is the most popular type of homeowners insurance policy.
QuoteWizard looked at the rate data in these reports from 2007 to 2016 which is the most recent data available and calculated the average rate increase that each state experienced over the last decade. These four states had the largest increases over the last 10 years.
Oklahoma: The Sooner State was number one when it comes to home insurance increases. Residents of Oklahoma have seen their homeowners premiums go up by an average of 78 percent over the last decade.
Severe weather is the big factor when it comes to ever increasing rates in Oklahoma. Hail and tornadoes are doing most of the damage, according to the Federal Emergency Management Agency (FEMA), Oklahoma has declared 186 natural disasters which puts it in second place behind California.
Hail and tornado damage can be extremely expensive, and those costs are passed onto policyholders through higher premiums.
Kansas: This state is right next door to Oklahoma and gets some of the same lousy weather which is why Kansas was number two on the list. The rate jump for Kansas was 71 percent over the last decade which translates into an average increase of $644.
Tornadoes are doing most of the damage in Kansas with the 2007 Greensburg tornadoes causing over $286 million in damage.
Colorado: The Centennial State slotted into the number three spot with an average increase of $620. Once again, natural disasters are the main problem with hail storms, tornadoes and wild fires being the big issue. Wildfires have become a major factor in Colorado after the 2012 Waldo Canyon fire, and the 2013 Black Forest fire. The two fires resulted in over $850 million in insured losses all by themselves and those costs have been passed on to policyholders through higher premiums.
In addition to severe weather problems, Colorado is also suffering from a shortage of construction workers as the cost of living and housing has gone up.
Nebraska: Colorado’s neighbor saw an increase of $595 which is a 74 percent increase over the last 10 years. Severe weather is a big factor in Nebraska with hail damage being a major problem. In fact, Nebraska ranks third in the country when it comes to hail storms according to data from the Insurance Information Institute. In 2017, they experienced 420 hail events.
Hail can do major damage to homes and cars. Roofing materials can be severely damaged requiring an entirely new roof. These types of claim expenses add up quickly and insurers end up passing those costs on to their customers.
The Rest of the Rankings
Arkansas rounded out the top five when it comes to dollar amount increases but other states saw a much higher percentage increase. Kentucky was the bigger winner (or should we say loser) when it comes a percentage increase with residents seeing their premiums head up by 88 percent which translates into a $507 bump.
South Dakota also saw a major percentage increase of 82 percent or $507. On the other side of the coin, Nevada, California, Alaska, Washington D.C. and Utah saw the smallest increases with Nevada homeowners only seeing a 7 percent increase in homeowners premiums.
Here are the full rankings according to QuoteWizard:
Rank | State | 2007 Premium | 2016 Premium | ###b#< Increase | $ Increase |
1 | Oklahoma | $1,054 | $1,875 | 78% | $821 |
2 | Kansas | $904 | $1,548 | 71% | $644 |
3 | Colorado | $826 | $1,446 | 75% | $620 |
4 | Nebraska | $807 | $1,402 | 74% | $595 |
5 | Arkansas | $762 | $1,348 | 77% | $586 |
6 | Louisiana | $1,400 | $1,967 | 41% | $567 |
7 | Missouri | $726 | $1,280 | 76% | $554 |
8 | Rhode Island | $950 | $1,496 | 57% | $546 |
9 | Minnesota | $800 | $1,340 | 68% | $540 |
10 | Connecticut | $929 | $1,455 | 57% | $526 |
11 | Kentucky | $578 | $1,085 | 88% | $507 |
12 | South Dakota | $618 | $1,125 | 82% | $507 |
13 | Mississippi | $1,019 | $1,525 | 50% | $506 |
14 | Texas | $1,448 | $1,937 | 34% | $489 |
15 | Alabama | $905 | $1,386 | 53% | $481 |
16 | South Carolina | $808 | $1,285 | 59% | $477 |
17 | Georgia | $724 | $1,200 | 66% | $476 |
18 | North Dakota | $771 | $1,239 | 61% | $468 |
19 | Wyoming | $656 | $1,120 | 71% | $464 |
20 | Tennessee | $723 | $1,185 | 64% | $462 |
21 | Montana | $700 | $1,130 | 61% | $430 |
22 | Massachusetts | $1,023 | $1,451 | 42% | $428 |
23 | North Carolina | $674 | $1,098 | 63% | $424 |
24 | New Jersey | $776 | $1,174 | 51% | $398 |
25 | Florida | $1,534 | $1,918 | 25% | $384 |
26 | New York | $936 | $1,309 | 40% | $373 |
27 | Indiana | $647 | $1,003 | 55% | $356 |
28 | Illinois | $700 | $1,042 | 49% | $342 |
29 | Iowa | $610 | $945 | 55% | $335 |
30 | Maryland | $692 | $1,022 | 48% | $330 |
31 | New Mexico | $667 | $996 | 49% | $329 |
32 | Washington | $506 | $822 | 62% | $316 |
33 | Ohio | $540 | $850 | 57% | $310 |
34 | Virginia | $683 | $966 | 41% | $283 |
35 | Idaho | $422 | $703 | 67% | $281 |
36 | Wisconsin | $491 | $762 | 55% | $271 |
37 | West Virginia | $646 | $917 | 42% | $271 |
38 | Maine | $596 | $866 | 45% | $270 |
39 | New Hampshire | $699 | $965 | 38% | $266 |
40 | Delaware | $559 | $816 | 46% | $257 |
41 | Pennsylvania | $689 | $927 | 35% | $238 |
42 | Michigan | $721 | $952 | 32% | $231 |
43 | Vermont | $704 | $898 | 28% | $194 |
44 | Hawaii | $850 | $1,026 | 21% | $176 |
45 | Arizona | $634 | $803 | 27% | $169 |
46 | Oregon | $496 | $659 | 33% | $163 |
47 | Utah | $505 | $664 | 31% | $159 |
48 | D.C. | $1,089 | $1,225 | 12% | $136 |
49 | Alaska | $861 | $974 | 13% | $113 |
50 | California | $925 | $1,000 | 8% | $75 |
51 | Nevada | $695 | $742 | 7% | $47 |
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A Few Tips to Lower Your Premium
If you live in a state that has seen a major increase, here are a few tips to help bring your premium back into affordable territory:
Upgrade Your Home: If you live in a state that sees major weather related damage you may want to consider upgrading your home a bit. Wind and hail resistant shingles can minimize the damage by storms and your insurer should offer a significant discount for your new roof. Adding storm shutters or even a sprinkler system can also result in a hefty discount on your premium.
Shop Your Coverage: This is probably the best way to save. Insurers rate risk differently which can result in dramatically different premium quotes. Be sure you are comparing apples to apples when it comes to coverage levels and deductibles.
Discounts: Insurers offer dozens of discounts so it is important that you are getting all of the discounts you are qualified to receive. Ask your agent to do a discount review to make sure that all available discounts are applied to your policy.
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