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Home insurance prices are expected to continue rising through 2024 and beyond, driven in part by what experts say is extreme weather in many areas of the country.
Data published by Insurifyan online insurance comparison website, showed that household insurance rates rose by nearly 20% between 2021 and 2023, with a further 6% expected before the end of the year.
Homeowners in Florida and Louisiana face the highest rates nationwide, with increases expected to be about 7 percent and 23 percent, respectively, next year.
Wind gusts blow across Sarasota Bay as Hurricane Ian moves south on September 28, 2022 in Sarasota, Florida. (Credit: Sean Rayford/Getty Images)
According to Colorado State University’s latest hurricane forecastthe states also rank in the top three of those likely to be affected by tropical cyclones during a La Niña regime.
“A ‘hurricane season from hell’ can pile up crisis after crisis,” said Betsy Stella, vice president of carrier management and operations at Insurify. “The financial solvency of all insurance companies will be tested. Perhaps especially to the newer providers that have entered the market recently.”
OVER HALF OF US HOMEOWNERS FEAR CLIMATE CHANGE HAZARDS WILL AFFECT HOMES
Florida is grappling with the insurance crisis
Although the Sunshine State has avoided catastrophic disasters in the past few hurricane seasons, more than a dozen insurance providers have left the state, leaving homeowners to rely on the state-run Citizens Property Insurance Corp.
The average rate in Florida is estimated to be about $11,000 a year, but Insurify said it could reach closer to $12,000 if the proposed rate increases are approved.
Experts say hurricanes are getting stronger for several reasons
Nasty hurricanes that cause billions of dollars in damage are hitting with increasing frequency.
Extreme weather conditions are not entirely to blame for the crisis, according to insurance industry insiders.
Reinsurance, fraud and the housing crisis have contributed to the lack of availability in the nation’s third most populous state.
“Insurers rely on reinsurance coverage to offset some loss exposure,” Stella said. “Reinsurance coverage has become difficult to obtain in Florida and reinsurance rates have skyrocketed. Reinsurers are subject to the same factors that affect core coverages: increased number and severity of natural disasters, inflationary pressures, and labor and material shortages.”
In addition to efforts to try to attract more insurers, several government proposals have been floated around to try to reduce the burden on home owners with mortgages.
Six of the ten most expensive cities for homeowners insurance are along the state’s coast, with Hialeah and Miami tops the list of communities with the highest premiums.
Hurricanes are not the only known influence on weather
In addition to hurricanes, the company said some surges in insurance may be the result of Forest fires in the western US and tornadoes in the plains.
California is one of many western states affected by devastating wildfires, and like homeowners in many other states, has seen a significant increase in premiums.
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Where companies no longer offer policies, the Golden State has what it calls the FAIR Plan, which provides financial protection for homes and personal property.
Experts at Insurify said if homeowners invest in weatherproofing around their homes, they could see some insurance discounts, but with more extreme weather conditions affecting the country, finding the lower rates is proving to be a challenge .
The lowest rates are found in Vermontwhere the average annual cost of insurance is estimated to be around $918.
Find more updates on this story at FOXWeather.com.
