With hurricanes increasing in frequency and intensity, it’s vital to carry homeowner’s insurance.
Unfortunately, the more storms we experience, the more insurance companies pay out in claims.
And to recoup that money they pay to policyholders, these insurers jack up premiums.
Insurance Claim HQ is an established law firm helping homeowners who have suffered property damage, including damage in a hurricane. We know the insurance industry very well. Our hurricane insurance claim lawyer looks at the relationship between hurricanes and insurance premiums—and we encourage you to call us if you have a claims issue.
How Much Should Hurricane Insurance Cost?
There is no benchmark for cost. We can only look at averages. According to insurance.com, the average homeowner’s insurance policy for Louisiana in 2024 is $3,594 a year, just a little under $300 a month. That’s the average. Yours might be more or less.
Remember, there is no “hurricane insurance” product. Instead, homeowners can get protection from windstorm damage with homeowner’s insurance, and protection from floods with flood insurance.
To better appreciate the connection between hurricanes and premiums, however, we need to look at average rates historically. The evidence is clear that increased storms since 2020 have led to markedly higher insurance premiums in Louisiana, as well as fewer options.
What Increases Insurance Premiums?
The premium you pay for home insurance hurricane coverage will depend on many factors:
- Location of your home. If you are in an area prone to storms, then you will pay more for the increased risk. Someone living in New Orleans will likely pay more than someone upstate.
- Size of your deductible. The deductible is the amount you are responsible for before your insurer chips in to cover losses. The larger your deductible, the lower your premiums.
- Any exclusions. The less a policy covers, the less you should pay. For example, a homeowner’s policy might exclude forest fires. The more your policy covers, the higher your premiums because there is a greater chance you submit a claim.
There is no question that increasing hurricanes in Louisiana and other Gulf states are putting upward pressure on insurance premiums. Let’s take a closer look.
Big Storms—Big Costs
Hurricanes can cause massive property damage. According to one study, the U.S. experienced 19 hurricanes and tropical storms between 2016 and 2021 which caused at least $1 billion in damage each. That’s a lot of money. The 19 storms alone caused half a trillion in damage collectively. During this stretch, five of the 10 costliest tropical cyclones in U.S. history made landfall.
Thanks to climate change, these storms are also causing more flooding. The warmer air holds more water, which gets dumped on New Orleans and other cities. More powerful storm surges also batter the cost, breaching levees and slamming into homes.
Premiums Have Jumped—By a Lot!
All of this storm activity is showing up in ballooning insurance premiums. Even the national news media has caught onto the story.
NBC News reported in 2022 on the sudden and steep increase in homeowner’s insurance in Louisiana. For example, one woman in New Orleans saw her premiums jump from $2,182 to $3,000 in a single year. When contacted by NBC News, the woman’s insurer (Occidental) claimed justified the increase based on the increase in powerful storms, as well as the increased cost of materials used in rebuilding.
Another woman profiled by NBC News living in Harvey suffered an 80% jump in her premiums. Her insurer, FedNat, had pulled out of Louisiana, and she was forced to find a new insurer.
Even the state’s insurer of last resort has not been spared. Louisiana Citizens Property Insurance pumped up their premiums by 63% for 2023. For 2024, the state-run insurance program increased only 3.5% for the state, but Coastal Plan policies saw an 8.4% jump.
During quiet years—those without costly storms—insurance premiums rise much more slowly.
According to Insurance Commissioner Jim Donelon, private insurance costs rose only an average of 1% per year from 2017 to 2021. But in 2020 and 2021, we saw four major hurricanes slam the state, which caused more than 600,000 people to submit claims. The rising costs showed up in the skyrocketing premiums mentioned above.
Until the frequency of storms subsides, we can settle into large premium increases—well above the 1% that homeowners enjoyed in 2017 and 2018.
Reinsurance Rates Have Increased
Insurance companies also protect themselves by buying insurance. This is called “reinsurance,” and it protects against years where claims explode, like the period after Ida hit the Gulf Coast.
The cost of reinsurance has also increased, however, because of the increase in the frequency and severity of storms. That means that reinsurance rates paid by insurance companies increase, and they pass the increase on to their consumers. There’s really no way to avoid it: more severe storms are leaving homeowners holding the bag.
Insurers Are Pulling Out of the South
Skyrocketing premiums are a real problem. But at least insurance is available. Unfortunately, many states are experiencing either bankruptcies of insurance companies or insurers which are refusing to write policies in states prone to hurricanes.
For example, Florida is undergoing a “home insurance crisis” in the words of Policygenius. As of 2023, insurance companies like Farmers Insurance are no longer selling policies and Nationwide refused to renew policies in certain high-risk corridors.
Louisiana has also seen many bankruptcies. The state enticed smaller insurers back into the state after Hurricane Katrina in 2005. And for a while, dozens of them flourished.
However, the storms in 2020 and 2021 have sent many insurers into insolvency. Hurricane Ida alone caused almost $7 billion in claims from homeowners. Six small insurers went bankrupt after Ida, which meant more homeowners were forced onto the state-run insurance pool. When insurance companies shut up shop, then competition declines.
Can You Reduce Your Premiums?
Paying close to $4,000 a year for homeowner’s insurance can make buying a home in Louisiana impossible. Some people might not be able to even stay in their house. But going without insurance is to invite disaster. What can you do?
One option is to fortify your home against storm damage. The key weak points on most properties include:
- Windows. You could add storm shutters or storm windows to prevent the glass from shattering during a storm.
- Roof. Fortify your roof to withstand storm damage. You might add hurricane clips to strengthen the roof.
- Foundation. Elevate your home so that it is less prone to flooding during a hurricane.
Another option is to increase your deductible. That means you will shoulder more of the costs after a storm. But your hurricane insurance cost will be lower each year thanks to reduced premiums. Some consumers might have no choice but to accept a hefty deductible just to get a policy that’s affordable.
Call a Hurricane Insurance Claim Lawyer after a Storm
What happens if your home is damaged in a storm? You should consider making a claim on your homeowner’s insurance policy. You bought the insurance for a reason. Now is the time to get your repairs paid for by tapping insurance benefits.
Unfortunately, many insurers are rejecting claims or they are delaying the adjustment process. The longer you wait, the more pressure you might feel to accept the first offer from your insurance company. Resist the temptation to accept an offer, which is usually too low. Call Insurance Claim HQ to speak with a hurricane insurance claim lawyer about your situation. We have obtained millions for homeowners.
