For the last 10 years, Texans have had the ignominious distinction of paying the highest or second highest home insurance rates in the nation. This year, we caught a break and are currently number three with an average annual premium of $1,625. Florida beat us out to take the top spot with an average annual premium of $1,991 followed by Louisiana with an average annual premium of $1,722 according to Value Penguin for 2015. Rounding out the top five were Mississippi ($1,451 a year) and Oklahoma ($1,428 a year).
Compare these with the list that appeared on Yahoo this week of the 10 states paying the lowest annual home insurance rates: Idaho ($538), Oregon ($567), Utah ($580), Wisconsin ($631), Washington ($648), Nevada ($674), Delaware ($678), Arizona ($691), Ohio ($721), and Maine ($741). It’s enough for a Texan to be a little jealous, but there is a reason for the difference in annual average premium, natural disasters.
The states with the highest home insurance rates also have the largest number of natural disasters. For Texas, these include hurricanes, floods, tornadoes, wind, and hail. The 10 states with the lowest annual rates don’t have the exposure to large catastrophic losses (hurricanes, wind, and hail) found in the Gulf states. Oklahoma made the top 5 due to it being having the most tornadoes per square mile than any other state.
Since Texans can’t control Mother Nature, it’s up to each of us to help contain home insurance rates. Here are four actions you can take to help keep your home rate low.
Compare Rates: Every couple of years it’s important to compare your home insurance rates with other carriers. We do this for each of our clients annually because rates fluctuate from year to year and from company to company.
Review Coverage: One of the reasons rates change from year to year is replacement cost for homes in Texas changes. Home prices have increased by 10% over last year in the Dallas / Fort Worth area alone, and this does impact what it costs to replace a home. Review your home’s insured value to determine if it’s experienced a higher adjustment than is reasonable. Also review your coverage to confirm if you’re paying for coverage you don’t need.
Review Discounts: When you review your policy, confirm if you’re getting all the discounts you should have. For instance, if you added a monitored alarm system, be sure to notify your agent. If you updated your plumbing or electrical system, or replaced your roof, mention that too. Many carriers provide discounts for these types of updates. There are also many other discounts available so ask your agent to see what you’re able to take advantage of.
Package your Car: Most home insurance companies provide a multi-line or multi-policy discount such as an auto / home discount. Many times it makes sense to place both policies with the same insurance company.
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