Severe weather and wildfires have home insurance rates climbing in states where rates had been cheaper

Hailstorms in Iowa have caused home insurance
rates to spike. (Photo by Champers Fu, Unsplash)

After a decade of severe weather and wildfires across multiple regions of the U.S., many home insurance companies have responded by increasing their rates to reflect emerging risks. 

Home insurance rate increases can be particularly onerous for rural residents who already pay more because of their distance from emergency and fire services.

In the past, traditional home insurance policies were more expensive in coastal states, where hurricanes could devastate hundreds of homes in a single season. Lower rates were reserved for inland states considered less likely to be hit by Mother Nature's seasonal wrath.

But that old playbook has been swept aside, report Carl Churchill, Jaclyn Jeffrey-Wilensky, Jean Eaglesham and Jason French of The Wall Street Journal. "Now, hailstorms, wildfires and wind damage are hammering places once thought to be shielded from the worst rate hikes."

In Iowa, where hailstorms have become more common, home-insurance rates have "increased 91% since 2021: In Florida, despite the hurricane risk, the increase is 35%," the Journal reports.

Before buying a new home, it can be worthwhile to see how much it will cost to insure. "Home-insurance premiums can vary dramatically, depending on where you live: Crossing a county line can more than double the cost," the Journal reports.

In high-risk areas of the country, finding an insurance company willing to issue coverage is difficult, and policy prices have skyrocketed. A resident in Braue of Orinda, Calif., said his "annual premium had shot up to $16,496, more than nine times his premium of less than two years ago," the Journal reports. "The reason? Wildfires, which are scorching homeowners’ chances of cheaper insurance in many states."

How states regulate home insurance rates also impacts home policy pricing. According to the article, "North Carolina is one of 11 states that allow regulators to veto requested home-insurance rate increases. . . .Cross over from Cherokee County, North Carolina, to Monroe County, Tennessee, and the typical rate jumps more than 50%." Despite similar risk assessments, the state with regulatory controls has lower rates.