This year’s hurricane season is expected to significantly increase home insurance prices in several states, according to a new report from Insurify. Florida, Louisiana, Mississippi, Alabama, Georgia, South Carolina, North Carolina, Virginia, and New York are among the states that may see higher home insurance costs due to hurricane impacts. Already, Florida has an average annual home insurance cost of $11,000, while Louisiana’s average cost is $6,354.
The average yearly home insurance cost for all Atlantic and Gulf Coast states is currently $2,994, which is 26 percent higher than the 2023 national average of $2,377. By the end of 2024, Floridians can expect to see an average cost of $11,759, a 7 percent increase. Louisiana will see prices jump from $6,354 to $7,809, while Mississippi could see an increase from $4,312 to $4,482. These anticipated insurance rate increases are due to the impact of hurricanes in 2024.
The predicted insurance price hikes coincide with the Atlantic basin becoming an “ideal environment” for hurricanes as El Niño transitions into La Niña, causing ocean temperatures to cool. The National Oceanic and Atmospheric Administration has reported a 60 percent chance of La Niña developing by June to August. Insurance companies are likely to reassess their risk models and adjust insurance rates if there is a surge in the number and intensity of hurricanes, leading to higher payouts for property damage, business interruption, and related claims.
Homeowners are already struggling to afford their properties, with 30 percent of surveyed homeowners saying they can’t afford their current mortgage interest rates now or in the future. The pandemic has also seen a surge in population in Southeastern states due to looser coronavirus guidelines, causing some insurance costs to rise. This increase in insurance prices can be challenging for homeowners facing rising expenses in other areas as well. Rising rates may make home ownership in the affected areas more difficult and could potentially deter individuals from relocating to homes in these states.
Overall, the rise in insurance rates is expected to have a negative impact on home ownership in the affected areas in the long term. For many homeowners, the increasing costs of insurance may make it financially impossible to afford and insure a house, leading to potential decreases in home ownership rates. As homeowners face higher bills across various sectors, the additional burden of increased insurance costs due to hurricanes could further exacerbate financial challenges for individuals in these states.
