Over the last few years, home insurance premiums, and the rate at which they're rising, have both increased sharply, and created some major financial headaches for millions of Americans. Of course, those in the property and casualty insurance industry know that there are certain parts of the country where this is more true than others, and in these places some steps may have to be taken to soothe concerns homeowners might have.
Recent data from the National Association of Insurance Commissioners shows that the average homeowners insurance rate jumped 7.6 percent in 2011, after an increase of just 3.3 percent the year before, according to a report from Investopedia. Meanwhile, as of 2013, the average homeowner paid more than $1,000 for coverage. But in some states - specifically those along the Gulf Coast - the prices and increases have been even steeper because of the growing risk of major storms making landfall there. While a major storm hasn't hit that part of the country for some time now, experts are concerned about the likelihood that it could happen in the next few years, and in many cases insurers are still dealing with the financial difficulties that stemmed from Hurricane Katrina making landfall.
Which places are least affected by these increases?
Meanwhile, the parts of the country that are farther away from the Gulf Coast seem to be the ones that have the lowest home insurance costs and rate hikes, the report said. In all, eight states have residents paying an average of less than $700 annually for their home insurance coverage, and three of the top five are tucked into the Northwestern U.S.: Idaho at No. 1, Oregon at No. 2, and Washington at No. 5. Utah and Wisconsin were third and fourth, respectively. Nevada and Arizona, two more desert states, also made the top eight.
These are states where there are very few headlines about natural disasters befalling them, the report said. Hurricanes never hit Seattle, and Milwaukee being rocked by a major earthquake isn't a plausible scenario. As such, homeowners there can generally depend on steady home insurance costs going forward.
The more property and casualty policy issuers can do to help their clients understand why costs increase as they do, the better off they're likely to be in terms of both keeping those people satisfied with their coverage and retaining them as clients even if lower costs can be had elsewhere.