While mortgage rates and home prices have drastically spiked over the last year, making home ownership difficult and even impossible for millions of American families, yet another obstacle to homeownership has popped up: higher home insurance premiums.
The average cost of home insurance for a $300,000 property in the U.S. surged 12% in 2023, to approximately $1,770 per year, according to a new report from Insurify, an insurance comparison website headquartered in Massachusetts.
However, some states have seen even more astronomical increases, particularly states plagued by severe weather and natural disasters. More of these areas are considered high risk and unprofitable for insurance companies.
Some of these companies are even opting to leave states such as California and Florida entirely, driving prices even higher for homeowners.
For example, in Florida, the most expensive state for home insurance, the average annual cost rose $9,213 last year, 421% higher than the national average.
Rates jumped by 14% in 2023, after several major insurers stopped renewing certain policies or left the state entirely, citing risk of hurricanes. Severe weather damages in the state topped $15 billion last year alone.
In Oklahoma, home insurance costs an average of $4,782 per year, 170% higher than the average, and premiums rose 24% in the state last year.
Glen Mulready, the Oklahoma Insurance Commissioner, has blamed the increase on weather and the rising cost of building materials.
“The median home value in Oklahoma is nearly 50% lower than the national average, according to U.S. Census Bureau data,” Insurify wrote in the report. “However, with insurance rates surging, homeownership in Oklahoma isn’t as attainable as property values suggest.”
Mississippi homeowners saw an average insurance rate of 23% last year, with annual costs hitting $4,017, roughly 127% higher than the national average.
Insurify said the increase is likely the result of what the National Weather Service called “unprecedented, historically destructive severe weather” that ran through the Deep South over the summer.
In Texas, insurance rates rose 18% in 2023, 124% higher than the national insurance rate. Home insurance in Texas now costs about $3,969 on average. The state also experienced many severe weather events last year, 16 of which caused more than $1 billion in damage apiece.
Kansas home insurance rates jumped 19% to an average of $3,245, 83% higher than the national average. The increase was also impacted by severe weather, including storms, high winds, tornadoes and flooding in July. Kansas is also prone to wildfires.
In 2023, Georgia insurance rates hit $2,173, a 17% spike from the previous year. Last year alone, 12 natural disasters cost the state about $38 billion in damages.
In Nebraska, where severe weather events also repeatedly hammered the state, homeowners insurance is nearly twice as expensive as the national average. The average annual rate rose by 14% in 2023, to $3,519
The average annual home insurance cost is $3,308 in Colorado, a significant increase from previous years, and 87% higher than the national average.
Additionally, a few states saw higher costs despite fewer drastic increases over the national average. Massachusetts, for example, saw home insurance rates that were actually lower than the national average, about 7% lower, at $1,649. However, they also saw costs increase by a 582% higher rate than income, the largest gap between insurance increases and wage growth.
Similarly, in New York, Insurance rates were 10% higher than the national average, at about $1,942 in 2023. However, the overall cost of living, as well as severe weather events, has driven up rates significantly.
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