MEMPHIS, Tenn. — There are more reasons than Americans would prefer when it comes to high home insurance rates.
Memphians are seeing the highest average home insurance rates in the entire state. The average price for home insurance in the Bluff City is roughly $3,100 a year, according to a recent report by Money Geek.
Part of the problem has been linked to severe weather, and the cost of the aftermath that follows it, especially as weather patterns change and become more intense.
Over the past year, the average American saw a 20% jump in their home insurance premium according to Bankrate.
“Going back to the '80s, losses for natural disasters have gone up 10 times," said Sean Kevelighan, Insurance Information Institute CEO. "We’ve seen in the 2000s nine of the top 10 record loss years.”
As a result of the high likelihood of severe weather, places like Florida are even starting to see insurance rates cause hesitancy in even buying a home.
“At this stage of our lives, we are not willing to risk our lives' financial well being by buying a home that may one day be uninsurable,” said Deborah Wood, a Florida resident.
At points, weather has gotten so bad, certain insurance companies have stopped accepting insurance applications in states all together. Last year, State Farm did so in California because of the growing catastrophe rates in the state from events like wildfires.
“When an individual insurer might see claims uptick in a certain area where the costs are simply too high, then decisions might be made by an insurer not to do business with an individual consumer, and/or a region in general,” Kevelighan said.
According to III however, Tennessee and other parts of the Mid-South do not have to worry as much when it comes to insurance companies leaving, but this does not mean high prices are avoidable all-together, mainly due to inflation.
“The inflation that came out of COVID has just exasperated the situation,” said Kevelighan.
In good news, III estimates inflation is likely going to cool down in the near future, but there is still plenty to do to save on insurance.
III recommends the following:
- Shop around with different insurance providers
- Check to see if your insurance includes guaranteed replacement costs
- Explore raising your deductible
- Explore bundling insurance products with the same company for a deal