Rockland Insurance Blog

All You Ever Wanted to Know About Insurance

Why does my Home Insurance premium keep going up?

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

 

 

 

 

 

 

 

 

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. 




Discussion

There are no comments yet.


Leave a Comment

Required fields are marked with

Comment

Your name, comment, and URL will appear on this page after it has been reviewed and approved. Your email address will not be published.