Homeowners insurance rates are increasing throughout the US
Homeowners insurance has become a tricky subject in the U.S. Costs for this type of coverage are typically high in regions that are prone to natural disasters, such as those along the coastline of the Gulf of Mexico. States like Florida and Louisiana typically see high home insurance rates due to the fact that they have been victims of major hurricanes in the past. Homeowners insurance rates are growing, however, and this is not being restricted to just a few states.
Rates grow by an average of 36% nationwide since 2003
Since 2003, homeowners insurance rates throughout the U.S. have rose by 36%, nearly double the rate of inflation. The states that are seeing the highest increase in rates border the Gulf of Mexico or the Atlantic Ocean, making them prone to storms. The National Association of Insurance Commissioners notes that the 14 states that are seeing rates grow more quickly report growth of 44% or more in these rates. Florida, however, has reported that homeowners insurance rates have grown by 91%.
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Higher rates linked to disastrous storms
Higher homeowners insurance rates could be due to various factors. Recent storms have put pressure on the insurance industry, forcing insurers to find ways to recoup the losses that they experience from powerful natural disasters. Recent storms have certainly proven to be costly disasters, but Florida has managed to avoid a major hurricane for the past several years. In this state, the reasons behind the growth of homeowners insurance rates may be purely political.
Coastline residents pay significantly more for homeowners insurance coverage
While homeowners insurance rates are growing nationwide, those living along the shore collectively spend $4 billion more on their coverage than those living inland. This disparity highlights the risks that states away from the coast experience compared to those bordering the ocean. Hurricanes are not the only natural disaster that contributes to growing homeowners insurance rates, of course, but they are some of the most consistently expensive disasters that visit the U.S. every year.