I, like the author, thought that California or Florida would be tops on the list of most expensive states to purchase home insurance, but we were both wrong - Texas is the highest at an average premium of $1,238 according to the National Association of Insurance Commissioners (NAIC). Second and third on the list were Louisiana ($840) and Oklahoma ($800). Cheapest state was Wisconsin.
The reason this is the case is because all of those catastrophes (hurricane, flood, earthquakes) aren’t typically covered by the basic insurance policy, you need to purchase riders. The extra money spent on riders wasn’t considered in the study, which sort of makes it pretty much useless.
But in other news, rates may be leveling off (with respect to inflation of course) because home maintenance is improving and building material prices are sagging.
Bob Hunter, who is now director of insurance for Consumer Federation of America (CFA), points out that for years premiums had increased at around the annual inflation rate. According to CFA, in 2001 homeowners’ insurance rates went up by a median 7%, and in 2002 by a median 13%. Reasons include dropping interest rates and a stock market slump, he says. Both mean it’s harder for insurance companies to make money on their investments. The increases dropped back down last year, to around 4% or 5%, says Hunter. “This year we’re talking back around inflation.”
And a shout out to my fair state:
In Maryland, State Farm charges nearly twice as much in Montgomery County, which butts against Washington, D.C., as in Frederick County, which is one county north.
via Yahoo Finance
One Comment
Our Miami, Florida, State Farm homeowner’s renewal premium on 11/06 shot up from $2950 to $8800 a year! I quickly had to meet with them and start cutting coverages. I now must set aside on my own $10,000 to cover any future hurricane eventualities. How many middle class workers can save $10,000? I live in a tiny old house. My sister lives in a newer mini-mansion. Hers went up to $10,000, only $1,200 more than mine. My brother didn’t get an increase from Allstate this year. Due to this obscenity and to the disparity in who gets charged what, we’ll be leaving S. Florida in the next 3 years after living here all our lives.
Post a Comment