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Insurance Costs Add Pressure to Housing Affordability in These 10 States

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Affordability

Insurance Costs Add Pressure to Housing Affordability in These 10 States

There's another hurdle to housing affordability in states experiencing increasing frequency and intensity of severe weather events caused by climate change


February 26, 2024
Aerial view of Matlacha Florida showing hurricane damage
Image: Felix Mizioznikov / stock.adobe.com

As insurance companies raise home insurance premiums in high-risk states, homebuyers have another factor to consider when weighing up the affordability of a home purchase, a new report from insurance comparison website Insurify reports. Insurify analyzed data for average home insurance cost by state for $300,000 dwelling coverage across the U.S. and compared local wage growth with rate increases to determine which states are the most or least affordable for home insurance. Florida, Oklahoma, and Mississippi top the list of the 10 states with the highest average insurance premiums in 2023.

Florida saw severe weather damages exceeding $15 billion in 2023, including $3.6 billion from Hurricane Idalia.[3] Several major home insurers stopped renewing certain policies or left Florida entirely, and rates increased by 14% in 2023 — making Florida the most expensive state for home insurance.

Due to high hurricane risk, Farmers [Insurance] stopped offering home, auto, and umbrella policies in July 2023.[4] Progressive also didn’t renew approximately 100,000 high-risk home policies. With few private options for homeowners insurance, more than 1.4 million homeowners have turned to the not-for-profit Citizens Property Insurance Corp., Florida’s insurer of last resort.

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