What does the home insurance premium average measure?
When we talk about home insurance costs in the United States, we measure the average pricing. This means that we talk about all 50 states at once.
The home insurance premium average, therefore does not measure if one specific company raises their prices, but it does take it into account, as well as the different policies that the people are paying for.
This gives a good overview of the state of the home insurance market in the United States, but could be not representative for your specific area.
In the last couple of years, the area specific market prices have gone up in high-risk states like Florida and Texas, because of climate change: An increase in floods and hurricanes has insurers raise their premiums.
But the average national premiums have also gone up by a lot more.
Why is the average home insurance cost going up due to moves?
Climate change is still the leading cause of the rise, but not in the way that you might expect.
Americans are moving states. Often. And the states that they are moving to most, are states like Texas and Florida, among other high-risk states.
These states have a lot higher risk for natural disasters that are linked to climate change, like floods and hurricanes. And therefore the premiums in these states are a lot higher than the average pricing in the United States.
This causes the average to shift upwards, are more Americans are paying higher insurances, but it might not mean that the price of insurances in all states are going up.
How does this impact my own home insurance premiums?
As climate change impacts the riskier states, costs in the home insurance market rise. If your state is not prone to natural disasters, you still have to deal with the aftermath.
As the market shifts upward, insurers see the possibility to create a natural upward trend of the home insurance prices: If the average goes up, you can pay more and stay ‘below average’ as a marketing technique.
Besides this, inflation still affects all areas of the country.
If you are thinking of moving places, be sure to take into account not just the house prices, but also the home insurance costs.
A lot of places struck with disasters, have lower house prices, but skyrocketed premiums. This will in the long-run turn that cheap steal into a high priced condo.