Finance
Home insurance costs are highest in these states – Here’s how to lower your premiums
Climate-related disasters are making the cost of insuring a home unbearable for many Americans, a recent report said. (iStock)
Soaring home insurance costs could force Americans out of states with the highest price tags, according to a recent report.
Home insurance premiums for a $300,000 property in the U.S. increased 12% in 2023 to an average $1,770 per year, the Insurify report said. However, homes in areas at risk of more climate-related damages tend to pay higher premiums, while homes in less disaster-prone areas pay less.
For example, homeowners in Florida — a state battered by high-cost natural disasters — pay an annual average of $9,213. Americans living in Vermont, a “very low” or “relatively low” risk state in FEMA’s National Risk Index, pay an average rate of $914.
Moreover, homeowners in disaster-prone areas face the challenge of finding an insurer. The cost of climate-related catastrophes has pushed several major home insurers to stop renewing certain policies or leave states like Florida and California entirely.
“Nearly 75% of people who bought real estate in 2020 and 2021 have regrets about their purchases, with 30% saying they spent too much money, the 2022 American Home Buyer Survey by Anytime Estimate reveals,” the report said. “The rising cost of home insurance presents another obstacle, especially for homebuyers who pushed their budgets to the limit to secure a low mortgage rate.”
These are the ten states where least affordable states for insurance and how much homeowners paid on average in 2023:
- Florida, $9,213
- Oklahoma, $4,782
- Mississippi, $4,017
- Texas, $3,969
- Kansas, $3,245
- Georgia, $2,173
- Nebraska, $3,519
- Massachusetts, $1,649
- New York, $1,942
- Colorado, $3,308
If you have a mortgage, you’re typically required to carry homeowners insurance, but you don’t have to stick with any particular insurance company. Visit Credible to compare home insurance rates from top insurance carriers all in one place.
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Car insurance rates impacted by climate risk
The higher cost of covering climate-related damages has pushed several insurers to leave markets at higher risk of natural disasters, according to a second report by Insurify.
In the last few years, Allstate, American International Group, Inc. (AIG), Farmers, Nationwide, AAA Insurance and State Farm have either pulled or reduced coverage in California, Florida and Louisiana. In some cases, these companies chose to withdraw coverage completely, while in others, they avoided the state’s most at-risk properties.
It’s not only home insurance that is being impacted, according to Betsy Stella, Insurify vice president of carrier management and operations. Cars are increasingly being caught and destroyed in fires and floods, and severe cold snaps that bring ice increase the likelihood of collisions.
“This has led to auto insurers paying a higher number of — and a higher price for — customer claims,” Stella said in a statement. “As a result, customers are seeing higher premiums as insurers increase prices to cover these losses.”
If you want to save on your car insurance costs, consider changing your auto insurance provider for a lower monthly rate. Visit Credible to shop around and find your personalized premium without affecting your credit score.
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Disaster-proof your home to lower costs
Beyond moving to a low-risk state, homeowners can take these steps to disaster-proof their homes, lower insurance costs and protect their investments, according to Insurify.
Insurers recommend trimming trees and branches away from the house, inspecting a home’s roof to repair loose or damaged shingles, securing loose gutters and sealing gaps and cracks around windows and doors to prevent water intrusion. These are all low-cost ways to help reduce potential damage to homes. Upgrading a home to include a wind-rated garage door or hurricane shutters could also help reduce the impact of major hurricanes.
“Buying a home in an area with fewer severe weather risks could save homeowners from exorbitant climate-related rate hikes for now,” the report said. “But homeowners insurance prices in lower-risk states might not remain stable for an entire 30-year mortgage.
“As climate change progresses, home insurance rates will likely continue rising to make up for the risk, threatening the American dream of homeownership,” the report continued.
Whether your concern is hurricane damage, tornado damage, wind damage, flood damage, or beyond — it’s best to obtain multiple quotes from several insurance companies to compare prices and what is and isn’t covered. To help you find the best insurance rate for your situation, visit Credible to compare multiple providers and choose the right option.
Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.
Walmart stock may be a steal.
Former Walmart U.S. CEO Bill Simon contends the retailer’s stock sell-off tied to a slowing profit growth forecast and tariff fears is creating a major opportunity for investors.
“I absolutely thought their guidance was pretty strong given the fact that… nobody knows what’s going to happen with tariffs,” he told CNBC’s “Fast Money” on Thursday, the day Walmart reported fiscal fourth-quarter results.
But even if U.S. tariffs against Canada and Mexico move forward, Simon predicts “nothing” should happen to Walmart.
“Ultimately, the consumer decides whether there’s a tariff or not,” said Simon. “There’s a tariff on avocados from Mexico. Do you have guacamole with your chips or do you have salsa and queso where there is no tariff?”
Plus, Simon, who’s now on the Darden Restaurants board and is the chairman at Hanesbrands, sees Walmart as a nimble retailer.
“The big guys, Walmart, Costco, Target, Amazon… have the supply and the sourcing capability to mitigate tariffs by redirecting the product – bringing it in from different places [and] developing their own private labels,” said Simon. “Those guys will figure out tariffs.”
Walmart shares just saw their worst weekly performance since May 2022 — tumbling almost 9%. The stock price fell more than 6% on its earnings day alone. It was the stock’s worst daily performance since November 2023.
Simon thinks the sell-off is bizarre.
“I thought if you hit your numbers and did well and beat your earnings, things would usually go well for you in the market. But little do we know. You got to have some magic dust,” he said. “I don’t know how you could have done much better for the quarter.”
It’s a departure from his stance last May on “Fast Money” when he warned affluent consumers were creating a “bubble” at Walmart. It came with Walmart shares hitting record highs. He noted historical trends pointed to an eventual shift back to service from convenience and price.
But now Simon thinks the economic and geopolitical backdrop is so unprecedented, higher-income consumers may shop at Walmart permanently.
“If you liked that story yesterday before the earnings release, you should love it today because it’s… cheaper,” said Simon.
Walmart stock is now down 10% from its all-time high hit on Feb. 14. However, it’s still up about 64% over the past 52 weeks.
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Investors may want to reduce their exposure to the world’s largest emerging market.
Perth Tolle, who’s the founder of Life + Liberty Indexes, warns China’s capitalism model is unsustainable.
“I think the thinking used to be that their capitalism would lead to democracy,” she told CNBC’s “ETF Edge” this week. “Economic freedom is a necessary, but not sufficient precondition for personal freedom.”
She runs the Freedom 100 Emerging Markets ETF — which is up more than 43% since its first day of trading on May 23, 2019. So far this year, Tolle’s ETF is up 9%, while the iShares China Large-Cap ETF, which tracks the country’s biggest stocks, is up 19%.
The fund has never invested in China, according to Tolle.
Tolle spent part of her childhood in Beijing. When she started at Fidelity Investments as a private wealth advisor in 2004, Tolle noted all of her clients wanted exposure to China’s market.
“I didn’t want to personally be investing in China at that point, but everyone else did,” she said. “Then, I had clients from Russia who said, ‘I don’t want to invest in Russia because it’s like funding terrorism.’ And, look how prescient that is today. So, my own experience and those of some of my clients led me to this idea in the end.”
She prefers emerging economies that prioritize freedom.
“Without that, the economy is going to be constrained,” she added.
ETF investor Tom Lydon, who is the former VettaFi head, also sees China as a risky investment.
“If you look at emerging markets… by not being in China from a performance standpoint, it’s provided less volatility and better performance,” Lydon said.
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