According to the National Association of Insurance Commissioners' most recent study of insurance premiums, drawn on 2005 data due to lags in state reporting, those four states rank among the nation's most expensive places to insure a home. Texans pay an average $1,372 in premiums, with Louisianans shelling out $1,144, and Mississipians and Floridians paying $939 and $929 a year.
Texas ranked as the state with most expensive insurance premiums, thanks to wind, rain, hail, tornados and hurricanes.
"Just about every type of peril is available here," says Texas Department of Insurance spokesman Ben Gonzalez. There is, however, one danger that no longer factors into the state's high insurance premiums: mold.
Back in 2001 and 2002, that wasn't the case. "There was a media frenzy about toxic mold, and the folks writing homeowners insurance got hit hard. It drove up premiums quite a bit," says TDI spokesman Jerry Hagins.
Now, if they could only bring hail and hurricanes under control as easily.
Why So Pricey?
Multiple factors, not necessarily the threat of a single disaster, spike prices. Tornados and floods make headlines, but hail and wind cause more damage in an average year. The combination of all four factors has premiums sky-high in the plains states of Oklahoma and Kansas.
Building costs are another determinant. Insurance pays out at replacement cost--the amount it would take in labor and materials to rebuild the house. In Washington, D.C., labor, regulations and the cost of business drive up construction prices, according to the National Association of Homebuilders.
And it's homebuilders who in turn pass that on to homebuyers. This overhead is eventually reflected in the costs an insurance company would have to pay in repairs.
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