National rates may be rising, but premiums are still partly dictated by individual state circumstances. Here’s why New York policyholders should pay attention.

New Yorkers are faring a little better on homeowner’s insurance costs than we do for auto rates. We managed to stay out of the top 10 most expensive home insurance states in 2019, coming in at number 12 with a monthly premium average of $105. This still means that New Yorkers are paying 16 percent above the national annual average of $1,083. This figure isn’t too bad, however, when you consider that Floridians are paying 90 percent above the average.

New York may be doing better than some states, but the U.S. overall has seen high and steady increases in homeowner’s insurance rates over the past decade. The biggest factor is the weather, which has caused more expensive property damage nationwide.

Data from the Insurance Services Office (ISO) via the Insurance Information Institute (III) show that 98.7 percent of home insurance claims in recent years came from property damage. While the overall figure does include theft, it was mostly influenced by large fluctuations in the number and severity of weather-related events such as hurricanes and winter storms. Wind and hail (33.1 percent) and water damage and freezing (29.5 percent) account for much of the damage.

Why New York should care that rate rises are weather-based

Catastrophes have accounted for huge national insurance losses over the last couple of decades, and the III projects that catastrophes are likely to increase along with coastal areas in the coming years. Given that the prime reason for rising homeowners insurance costs is escalating weather risk—and coastal areas are at particular risk—New Yorkers, in particular, should pay attention.

Flooding is the leading concern for our state, and residents in flood zones should make flood insurance a priority. New York City alone has over 520 miles of waterfront, and all state residents should be realistic and proactive about their insurance strategy.

Where the rates are most likely to show on your policy

Flood insurance must be bought separately from a homeowner’s policy and some residents choose to avoid it—but that’s not something we recommend. The potential costs of home repairs and temporary or permanent displacement are much more expensive.

The dwelling coverage portion of almost every homeowner’s insurance policy already includes financial compensation for damage by natural events, with things like windstorms, hail, fire, and lightning being considered covered perils. Protection against these are “rolled in” to what New Yorkers already pay for on a typical policy—and the increased occurrence of these events means that everyone is likely to pay more for insurance.

How much more could we end up paying? New York homeowners insurance rates increased by 40% between 2007 and 2016. If the pace of that increase holds steady, our current average annual state rate of $1,256 would amount to $1,758 in premiums per year by 2028. But it could easily be more than that if weather events get worse.

What New Yorkers can do to lower homeowners insurance rates

Taking steps to secure your home against bad weather will strengthen the structure and may lead to lower premiums through reduced risk of damage. New Yorkers may choose to increase their homeowner’s policy’s deductible to lower monthly premiums. There’s also the common practice of bundling multiple coverage types (e.g., auto, life, and home) with the same insurer to achieve a discount on all policies.

No matter how much rates rise, the NICRIS team is always here to help you find the coverage which suits you at the best possible price. Contact us to learn more.

NICRIS Insurance focuses on providing clients with the appropriate suite of products to protect them, their interests, and their loved ones. If you need some home insurance advice or would like a free, personalized insurance review just drop us a line.