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Homeowners Insurance Costs More in These States

Homeowners Insurance Costs More in These States

Home Insurance and Your Location

The housing market in the United States can be summed up in three words, “location, location, location.” Those same words can probably describe the home insurance market as well, where premiums vary wildly from state to state. For example, many home owners in Utah could easily pay under $500 for a good policy, while those in Texas often pay over $1,000 for even the most basic of policies. It doesn’t seem fair that you might have to pay double the premium as your relatives in the next state, but for providers, it’s all about calculated risk.

Why do Rates Vary so Greatly?

As you know, the main reason people take out home insurance is to protect their house from possible catastrophes or natural disasters. It only makes sense that premiums cost more in states where the likelihood of those disasters is higher. Since dramatic events such as floods and earthquakes are typically only covered in special forms of home insurance, they don’t play a large role in determining rates. Instead, rates are affected by the more widespread and frequent events like hale or windstorms, which are covered under most basic policies. It might be the major hurricanes making the news, but it’s the common storms causing the most damage, which is why states like Kansas and Oklahoma feel the brunt of higher rates. Here’s a look at which states are paying the most for coverage:

Top 10 Most Expensive States

  • Texas – Texas is the most expensive state to buy home insurance at an average of $1,328 per policy, mostly thanks to risks of tornadoes, hurricanes, and hail.
  • Louisiana – With parts of the state below sea level and many poorly made structures, Louisiana’s average annual premium is about $975.
  • Oklahoma – Although tornadoes are a major problem, it’s the constant windstorms that put Oklahoma’s premiums at $925.
  • Florida – Costing over $800, homeowners coverage in Florida comes at a high cost due to frequent hurricane risks.
  • District of Columbia – At $806 per policy, this area features many risks that cause rates to rise, such as unstable structures and even terrorist threats.
  • Mississippi – Wind and falling tree damage are the main culprits for Mississippi’s $793 annual premiums.
  • Kansas – You guessed it, it’s the whirling windstorms and tornadoes that cause inhabitants of Kansas to pay $772 for a policy.
  • Colorado – Colorado has an average premium of about $762, thanks to thunderstorms that bring about large chunks of hail.
  • California – As if the thunderous storms from the coast weren’t bad enough, many Californians are at risk for inland brush fires as well, causing their rates to reach over $750.
  • Minnesota – Minnesota barely makes the list at $733, which can be attributed to it’s heavy snow fall capable of collapsing buildings.
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