The key reason for a rapid growth of insurance premiums is the climate change that entails an increasing number of hurricanes, forest fires, and other natural disasters, experts say. However, Americans most often move to Florida, Texas, and other states most susceptible to this danger.
A new study by LexisNexis Risk Solutions that specializes in data and analytics showed that from 2015 through 2022, the average home insurance cost in the USA grew by approximately 21%, while in Florida, it surged by a whopping 57%.
Many in-migrants name the low cost of living as one of the major reasons for moving, but the cost of home insurance grows faster here than nationwide. For instance, in 2019, an average insurance premium in Florida was $1,988, and now it reaches $2,714.
Two out of three US residential properties are already uninsured at the moment, and a rapid price hike may force homeowners to additionally reduce the spending on insurance from natural disasters, which entails considerable risks. Floridians need it more than anyone else. Property insurance is usually mandatory when taking a mortgage loan, but it does not cover flooding. George Hosfield, Senior Director of Home Insurance at LexisNexis Risk Solutions, assumes that in the nearest future, many homeowners may stop insuring the potential flood damage, which puts them in an extremely unfavourable position.