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Homeowners Insurance Rates Change Based On Ever Changing Perils

By Mike Heuer

Depending on where a home is located in the United States, the amount paid to insure it changes greatly. Perils vary by location, and so do home insurance rates as a result.

In August 2013, homeowners paid an average $855 per year for their homeowners insurance rates, which is down from an average $902 paid annually in March of 2013, according to the National Association of Insurance Commissioners. But that amount paid rises or falls drastically depending on which part of the nation and even a state in which a home is located.

Homeowners insurance rates in Texas, for example, run an average $1,560 per year, according to the National Association of Insurance Commissioners. That amount is much higher than the $405 average for home insurance rates paid per year by homeowners in Idaho. While homes in Texas are not necessarily better or more expensive than those in Idaho, the difference in average homeowners insurance rates paid comes down to many factors.

Texas, being the second-largest state in the Union and having far more homes to insure than in Idaho, one of the smallest states with a relatively sparse population density when compared to many cities in Texas. The fewer homes as state has often times means fewer homes at risk for damage or destruction from various potential perils. And that means insurers don’t have to spread out the risk among more homes, as is the case with Texas and other high-rate states, like Florida, Louisiana and others.

In the case of Texas, homes there face a great many possible perils, including hurricanes, tropical storms, hailstorms, windstorms, wildfires, flash flooding, lightning and fire and many others. And with the many millions of homes located in Texas, that means a great number are at risk of extensive damage and destruction.

By contrast, Idaho homes have no hurricane risk, moderate wildfire risk and do face dangers from hailstorms, windstorms, flash flooding and other perils. But when homeowners and local communities initiate steps to mitigate the potential impact of those perils, the home insurance rates become much more affordable.

Among steps many communities have undertaken to mitigate potential flood damage includes installing water-diversion systems that channel flash flood and other waters around communities and prevent homes and vehicles from being damaged or destroyed. And homeowners can ensure their roofs are strong enough to withstand wind and hail damage, install storm shutters to prevent broken glass and take other steps to ensure their homes are protected against the elements, which results in decreased home insurance rates.
While there are many steps homeowners and local communities can initiate to reduce the risk of damages and thus the respective homeowners insurance rates within them, the federal government has been busy with efforts to control potential flood problems.

Since 2005, when Hurricane Katrina slammed into the Gulf Coast and caused a great deal of damage and destruction in New Orleans and many other locations along the Gulf Coast, federal officials have been identifying and expanding flood plain locations across the nation and requiring flood insurance protection for homes and other structures located within them. That spreads out the risk for the National Flood Insurance Program, which often times is only source of flood insurance for homes in vulnerable areas, and that makes it easier for home insurance firms to lower their rates since they do not provide the flood insurance plans.

One comment

> there’s speculation that at least that > many more homoweners haven’t made a payment in yoinks.How many of these foreclosures are by the mortgage companies, and how many are by other creditors?Specifically, in many states, homeowner associations have the power of non-judicial foreclosure, and can seize homes without court oversight for trivial amounts or reasons, such as “”” Associations may begin the foreclosure process as soon as 75 days after the payment was first due, whereas a tax collector must wait five years before beginning foreclosure for a tax lien. Associations are not required to go through a court to foreclose, as a property owner would to evict a tenant.”According to real estate broker Bill Carey, ” Non payment of association dues or fees has been the number one reason of foreclosures in condo and townhouse communities across the country. Families have lost there properties for $600.00 in over due payments, the real problem is $15,000 in added fees the management companies an attorneys are allowed to tack on which pushes the property in to foreclosure. I have interview many management companies and found that when they reference how their attorneys can speed up the collection process by foreclosure I show them the door.” Unfortunately, many HOAs want exactly those types of property managers and lawyers.One HOA attorney told the media that he had .Another HOA law firm proudly proclaims that they .Legal changes in Texas resulted in a .A few weeks ago, a World War II Medal of Honor recipient was sued by his HOA for putting up a flag pole on his property. If it hadn’t been for the intervention of his Senator, his Congressman, his Governor, the White House Press Office, and several weeks of publicity in the national press, could have lost his home.Former HOA lawyer Evan McKenzie — who runs the — notes that the which is a perfectly legal form of extortion and racketeering.Yet libertarians, conservatives, and free-marketeers believe that homeowner associations are some kind of . Even Walter Olson’s web site can’t be bothered to document abuses by HOAs.HOAs have the power of small governments, but are shielded as corporations. With such perverse incentives and power to foreclose, they represent one of the biggest threats to individual private property rights in America today.

by Cherkaoui on April 13, 2014 at 8:14 pm. Reply #

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