American Land Title Association CEO Diane Tomb discusses her outlook for housing costs, commercial real estate fears and strategy on mortgage rates.
The astronomic rise in mortgage rates and spike in home prices over the past year has pushed a key tenet of the American dream out of reach for millions of families.
Now, there is another obstacle to homeownership: higher home insurance premiums.
The average cost of home insurance for a $300,000 property in the U.S. surged 12% in 2023 to roughly $1,770 per year, according to a new report published by Insurify, an insurance comparison website headquartered in Massachusetts.
However, home insurance is even more expensive in states plagued by severe weather and other climate-related catastrophes. In fact, as the frequency and severity of destructive weather events have increased, more areas are considered high risk and unprofitable for insurance companies, the report said.
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A growing number of insurance companies are opting to leave states like California and Florida, driving prices even higher for homeowners.
Here’s a look at where you can expect to pay the highest premium for home insurance.
Florida
Florida is the most expensive state for home insurance, with the average annual cost rising $9,213 last year. That is 421% higher than the national average.
Waterfront homes near Naples Pier in Naples, Florida, on Feb. 13, 2024. (Lisette Morales McCabe/Bloomberg via Getty Images / Getty Images)
Rates jumped by 14% in 2023 as several major insurers stopped renewing certain policies or left the state entirely, citing concerns over hurricane risk. Severe weather damages in Florida topped $15 billion last year.
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Oklahoma
Home insurance in Oklahoma costs about $4,782 on average, 170% higher than what the typical American pays. Premiums rose 24% in the state last year; Oklahoma Insurance Commissioner Glen Mulready has blamed the increase on weather and the rising cost of building materials due to inflation.
The sky begins to clear following a thunderstorm on May 27, 2021 in Tulsa, Oklahoma. (Photo by Brandon Bell/Getty Images / Getty Images)
“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 in Mississippi saw an average insurance rate of 23% last year, with the annual cost hitting $4,017. That is 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.
Insurance rates in the state increased 433% more than income in the state in 2023.
Texas
Texas insurance rates rose 18% in 2023, 452% more than wage growth in the state and 124% higher than the national insurance rate.
Icy grounds at Margaret Hunt Hill Bridge Park following a storm in Dallas on Thursday, Feb. 2, 2023. (Photographer: Koral Carballo/Bloomberg via Getty Images / Getty Images)
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The Lone Star State also experienced a number of severe weather events last year, including 16 that caused more than $1 billion in damage apiece.
Home insurance in Texas now costs about $3,969 on average.
Kansas
Home insurance rates jumped 19% in Kansas last year to an average of $3,245. That is 83% higher than the national average.
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The increase was also influenced by severe weather, including storms, high winds, tornadoes and flooding in July. Kansas is also prone to wildfires.
Georgia
Georgia insurance rates hit $2,173 in 2023, a 17% spike from the previous year. By comparison, the median household income in the state rose just 2.3% last year, according to Labor Department data.
The Owens family looks at the damage to homes and property after a tornado touched down on March 26, 2023 in West Point, Georgia. (Photo by Megan Varner/Getty Images / Getty Images)
Georgia experienced 12 natural disasters last year that cost the state about $38 billion in damages.
Nebraska
Homeowner insurance in Nebraska is nearly twice as expensive as the national average. The problem got even worse in 2023, with the average annual rate rising by 14% to $3,519.
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Nebraska was also plagued by a number of severe weather events last year, including blizzards in the winter and flash floods and tornadoes in the summer.
Massachusetts
Home insurance rates in Massachusetts are actually lower than the national average. However, costs increased at a 582% higher rate than income in the state, according to the study, the largest gap between insurance hikes and wage growth in the country last year.
Average annual insurance costs are about $1,649 in the state, 7% below the national average.
New York
Insurance rates in New York hit about $1,942 in 2023, 10% higher than the national average.
Heavy snow blankets the yard of a house and surrounding areas in Amherst, Erie County, New York, on Dec. 25, 2022. (Photo by Xuehong Lyu/Xinhua via Getty Images / Getty Images)
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The overall cost of living is one factor driving up rates, as are severe weather events including flooding and rainstorms that shut down part of New York City in 2023. Upstate New York is also plagued by damaging and sometimes fatal blizzards that can cause thousands of dollars in property damage.
Colorado
The average annual home insurance cost is $3,308 in Colorado, a significant increase from previous years.
An aerial view of the Denver skyline. (Joe Sohm/Visions of America/Universal Images Group via Getty Images / Getty Images)
That is 87% higher than the national average.
