Home Insurance Rates Rise as a Result of Natural Disasters
Real Estate | November 12, 2019
Over the last 10 years, there has been a large increase in natural disasters and this is now leading to higher rates for home insurance.
In a study by the Insurance Information Institute, this increase in natural disasters worldwide has jumped from 500 in 2007 to 850 in 2018 saw 850. A bill of $350billion was racked up in insured losses, but the real cost is probably far more than this.
Insurance companies who need to maintain their profit margins are struggling and they are passing the cost on to homeowners who have seen premiums rocket, especially in areas that are seen to be prone to natural disasters.
Insurance Companies Have a Long Memory
Residents in Oklahoma, for example, have suffered from a 78% hike in their home insurance costs since 2007, affecting the average homeowner to the tune of $821 a year.
In 2009 the average homeowner in the State paid $1,054 a year for their home insurance, it is now over $1,800. The reason? Oklahoma has experienced 192 natural catastrophes since 1955.
The only state that has more problems with natural disasters is California. The state frequently experiences large wild-fires and FEMA acknowledges that in the same time frame they have had no fewer than 313 disasters.
In comparison, the average Californian homeowner has not faced such a huge increase. In fact, costs have only risen $75 since 2007.
Meanwhile, states like Kansas residents are seeing an increase of $644 a year for insurance; Nebraska and Colorado are taking a hit because of the number of tornadoes in the region seeing increases of 75% and 74% respectively to the amount of home insurance they must pay.
Home insurance rates have increased across the entire United States but some states are being hit harder than others. Besides Oklahoma, Colorado, Nebraska, and Kansas, other states that have seen huge price rises include Arkansas, Louisiana, Missouri, Rhode Island, Minnesota and Connecticut.