The variability of destructive weather forces from one state to the next has meant that homeowners can expect the property insurance marketplace to be quite complex, and they will need to do their homework in order to choose the best policy.
According to vice president Don Griffin of the Property Casualty Insurers Association of America (PCI), the variability in severe weather among the states and within the states makes it “worthwhile to do comparison shopping from time to time to make sure the premium you are paying and the coverages provided are appropriate.”
PCI data has shown that depending on where homeowners live, they can expect their rates to fall within a dramatic annual range of $400 to $1,400. For example, property insurance customers in Florida may pay $1,399, while the average in Idaho is only $401.
As the homeowners insurance industry is state-regulated, there is no standard across the country. The most expensive states for this type of coverage are not limited to a single location, but are spread all over the nation.
It should also be noted that these statistics do not included the additional charges that some must pay for the increased risk of earthquakes or hurricanes. For example, separate insurance for earthquakes offered in California will range from $800 to $1600 per year, depending on where the home is located within the state. Similarly, “windstorm” or hurricane insurance costs an average of $2,769 per year in states that offer this coverage.
While homeowners shopping for property insurance should recognize that their home value is an important factor (due to location) in determining their rates, they must also keep in mind that it is the replacement value, not the market value, that truly counts.