The average price of home insurance surged 23% in January compared to the previous year — with premiums in some states slamming inflation-battered homeowners by more than 60%, according to a recent report.
The national average rose to $1,759 a year — or around $147 a month — for a policy covering a $250,000 home amid the rise in natural disasters and construction costs, according to an analysis by Bankrate earlier reported by the Daily Mail.
However, insurance is not one size fits all, Bankrate noted, and premiums in Louisiana surged as much as 63% year-over-year, to $3,246 annually, according to CNBC, citing Quadrant Information Services data in ZIP codes in all 50 states.
In Nebraska, where weather patterns are notoriously volatile, the average home insurance policy for a $250,000 dwelling rose to $4,745 per year, or roughly $395 monthly, per Bankrate — about 170% above the national average.
The figure marked a staggering 61% year-over-year increase, CNBC reported.
Other states that saw the staggering year-over-year spikes were Colorado (49%), Arizona (40%) and Utah (37%).
The high insurance costs are a reaction to “the impact inflation has had on the previous losses experienced by the insurance company, the elevated cost of building materials and the future risk posed by extreme weather,” Bankrate said.
The US experienced 28 separate climate disasters costing at least $1 billion, according to the National Oceanic and Atmospheric Administration’s National Centers for Environmental Information.
The amount of 10-figure disasters “put 2023 into first place for the highest number of billion-dollar disasters in a calendar year,” NOAA said, noting the historic wildfires that destroyed Lahaina on Maui Island of Hawaii last year, as well as four flooding events, two devastating tornados and two tropical cyclones, among 17 other “severe weather” events.
Policies vary drastically depending on factors like the age, size and location of a home, the owner’s credit history, state regulations and natural hazards unique to different parts of the country.
Those factors made home insurance in Nebraska, Oklahoma and Kansas among the costliest in the US, according to Bankrate.
Oklahoma came in as the second-priciest state for homeowners insurance, with plans averaging $4,565 annually, or $380 monthly.
Kansas, where tornadoes ripped through the state in 2023, had rates of $4,072 per year, or about $340 per month.
The three states with the least expensive home insurance premiums were Hawaii ($408 per year), Vermont ($694) and Delaware ($764), according to Bankrate.
The average premium on a $250,000 home in New York was $1,728 for the year — nearly 2% less than the national average.
The housing market has been battered in recent months as high mortgage rates continue to price many potential homebuyers out of the market.
On Wednesday, the Mortgage Bankers Association said that mortgage demand plunged a whopping 10.6% the week of Feb. 16 compared with the previous week as interest rates surged over 7% — their highest level since early December.
The average contract interest rate for a 30-year fixed-rate mortgage with a $766,550 loan limit was 7.06% — up from 6.87% the week prior, per the MBA’s seasonally adjusted index, while borrowing rates on loans greater than $766,550 advanced from 7% to 7.16%.
As a result, applications for mortgages to purchase a new home fell more than 10% — roughly 13% lower than the same week last year and the lowest level since early November 2023, according to CNBC.
The 30-year fixed rate was 6.62% at this time last year.
This story originally appeared on NYPost
