Residential Areas with the Worst Home Insurance Rates

by JRO on November 12, 2013

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The rate that you pay for home insurance depends on different factors. These factors include where you live, the rate of property crime in your neighborhood, preventive measures that you have in place (i.e. smoke detectors, home security system, etc.), and loss claims for the area. For individuals who purchase a home in an area that is deemed high risk, the premium rate for home insurance is several times higher than the rate charged homeowners located in less risky areas.

Having home insurance is not something that is optional for a homeowner. Lenders will require proof of insurance before underwriting a mortgage loan. Knowing what areas are more expensive than others based on risk, as well as the factors that cause rates to increase within a community can be helpful for a homeowner looking to lower costs when purchasing a home or buying coverage. It is also helpful to know what types of risk reduction measures can be taken to reduce a home insurance rate.

Areas with the Highest Home Insurance Rates

On average, homeowners pay around to $909 annually for insurance, based on data provided to the Insurance Information Institute by the National Association of Insurance Commissioners (NAIC), which is made up of state insurance commissioners from all 50 states and the District of Columbia. This amount is up 3 percent from the prior year’s amount of $880 and 53 percent higher than the average amount of premiums paid in 2002 for home insurance.

The top five areas of the country that have the highest rates for home insurance on average are Texas ($1,560), Louisiana ($1,546), Florida ($1,544), Oklahoma ($1,246), and Mississippi ($1,217). The areas with the lowest rates are Washington State ($595), Wisconsin ($563), Utah ($558), Oregon ($535), and Idaho ($500).

Factors that Cause Rates to be Higher

Looking at the five states with the highest home insurance premiums and comparing them with the states with the lowest rates, one can easily surmise the following: (1) the top five states are located in coastal regions of the country that have a higher flood risk due to hurricanes, excluding Oklahoma; (2) these states have the highest number of recorded tornadoes, with Texas, Florida, and Oklahoma ranking 1, 3, and 4, respectively.

Homeowners who live in high-risk areas are more likely to participate in what are known as natural catastrophe insurance programs than in standard home insurance programs with lower rates. The plans are offered under what is known as the FAIR (Fair Access to Insurance Requirements), Beach and Windstorm Plans, established in the 1960s for high-risk urban and coastal areas. Programs with the largest amount of growth between 2005 and 2009 include those in Florida (Florida Citizens Property Insurance Corporation), California (California Earthquake Authority), Texas (Texas Windstorm Association), and Mississippi (Mississippi Windstorm Underwriting Association).

Risk Reduction Measures that Can Help Lower Home Insurance Rates

One of the clearest methods employed to reduce a homeowner’s risk and receive lower rates for home insurance is to locate in a low-risk area or zip code. Weatherizing your home in areas that are subject to greater risk for flood and wind damage can also be a factor that can help lower your premiums. Locating a home inland instead of on a coast or known flood or wind damage zone is also something to consider.


Gary Winston is a freelance writer focusing on finance, insurance, taxation and real estate. Gary recommends that those interested in pursuing a career in the world of finance take a look at the banking jobs with

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