Rates Surge For Homeowner And Flood Insurance

Hurricane Helene devastated homes and businesses from Florida to North Carolina, leaving properties flooded and buildings destroyed. Now Rates On Homeowners’ and Flood Insurance will surge just like the waters of the storm. The financial toll will be enormous as the storm ravaged an expansive area. Cara, a homeowner in Florida’s Big Bend area, returned to find her home submerged after 12 feet of storm surge. Meanwhile, Jillian, who lives in North Carolina, saw her family’s small business destroyed by flooding, and she’s unsure how they’ll recover financially.

Rebuilding After the Storm Will Be Costly

As residents like Cara, Rae, Jillian, and Tabitha begin rebuilding, they will face massive financial burdens. Many homeowners lack the proper coverage to recover fully. Rae discovered that her homeowner’s insurance doesn’t cover flood damage, leaving her scrambling to find funds to rebuild her damaged home. Similarly, Tabitha’s home was partially destroyed, and while her hurricane insurance will cover some costs, it won’t cover the expensive water damage.

Soaring Costs for Homeowners and Flood Insurance

The storm arrived at a time when home and flood insurance costs have already been skyrocketing. Many households have been forced into low-cost plans with reduced coverage. Cara chose a low-cost homeowner’s policy due to rising premiums, only to find out that her coverage was insufficient after the storm. Jillian’s family couldn’t afford full flood insurance and is now facing thousands in out-of-pocket expenses to repair their home.

Inflation and Rising Building Costs Exacerbate the Problem

Years of inflation and surging material costs, paired with more frequent hurricanes, have pushed insurance prices higher. Homeowners are feeling the pressure, especially in disaster-prone regions. Rae’s insurance premium jumped by 20% last year. Now, with damage from Helene, she’s unable to afford the rising cost of rebuilding her home. Likewise, Tabitha is struggling with repair bills that are far higher than her insurance coverage due to inflated construction material costs.

Homeowners Will Face Further Insurance Price Increases

Homeowners at properties damaged by Helene are likely to see their insurance costs rise even further, imposing financial strain for years to come. Jillian’s insurer has already warned her that her premium will rise next year after they settle her claim for flood damage. Cara, whose home was hit hard by both wind and water, has been told to expect higher rates due to increased hurricane risks in her area.

Living in High-Risk Areas Is Becoming More Expensive

There’s no question that the burden on households’ budgets has increased in recent years. It has become more expensive to live in areas hit by hurricanes, tornadoes, floods, and wildfires. Tabitha, living near the coast in North Carolina, is facing higher costs every year as her insurance provider adjusts premiums due to frequent storm activity. Rae, residing inland but in a flood zone, has also seen premiums skyrocket, making it harder for her to stay in the area.

Helene Set Records for Rainfall and Flooding

Helene dropped more than 2.5 feet of rain on North Carolina, which produced the biggest local flooding in recorded history. The path of the storm’s devastation spanned over 580 miles. Jillian’s home saw water levels rise so high that it became impossible to save anything on the first floor. Meanwhile, Rae’s entire neighborhood was underwater for days, causing significant damage to all the properties in her area.

Insurance Costs Have Been Skyrocketing for Years

Homeowners are set to draw on insurance policies that have become much more expensive in recent years. In 2023, the nationwide average premium for owner-occupied homeowners insurance climbed about 13%, rising two times more than the overall inflation rate. Cara, who already struggled to make her payments before Helene hit, now worries about affording next year’s premium. Jillian, whose home was severely damaged, is concerned about how much more her flood insurance will cost after the storm.

IDR Predicts More People Will Choose Cheaper, Weaker Plans

Rising prices leave customers less likely to purchase strong plans with ample benefits in the event of a disaster. With costs going up, people are getting less insurance, and that’s going to be a problem when disasters like this hit. Cara opted for a low-cost insurance plan, but now she regrets it as it’s not enough to cover the damage to her home. Tabitha also scaled back her coverage due to financial constraints, and now she faces a long recovery process.

Hurricane Insurance Does Not Cover Flood Damage

Homeowners insurance sometimes includes separate hurricane insurance, which typically involves an additional deductible for damage incurred by a hurricane. However, neither homeowners insurance nor hurricane insurance covers flood damage, meaning consumers must purchase flood insurance separately. Rae didn’t know this until it was too late, leaving her to cover flood-related damage out of pocket. Jillian also realized after the fact that her homeowner’s insurance wouldn’t help with the floodwaters that damaged her home.

Helene Highlights the Need for Better Flood Insurance Enrollmen

The damage caused by Helene could expose the difficulties caused by the relatively low enrollment rate in flood insurance. With an event like Helene, where we’re seeing all this water, there’s likely to be more uninsured losses happening due to water. Tabitha didn’t invest in flood insurance because she assumed her hurricane policy would cover it, only to be faced with expensive repair bills. Rae also skipped out on flood insurance, believing her home wasn’t at serious risk.

Flood Insurance Costs Are Expected to Keep Rising

The price of flood insurance has also increased in recent years. Now it’s expected to rise even more under the new “Risk Rating 2.0” approach. Jillian’s home, located near a river, is expected to see a flood insurance hike as her area’s risk rating is adjusted after Helene. Cara, living in a coastal flood zone, also worries about how much her premiums will increase under this new system.

Homeowners Face Difficult Choices in Disaster-Prone Areas

The prospect of higher insurance costs could prompt difficult choices for homeowners and their communities. The higher cost of living in disaster-prone areas is hitting households’ pocketbooks in ways we haven’t seen before. Tabitha is now reconsidering whether it’s worth staying in her coastal home given the rising insurance costs and frequent storm damage. Rae is thinking about moving away from the flood-prone area. Even though she love it, as the costs of staying now outweighs the benefits.

IDR: Your Resource for Insurance Comparison and Education

Given the rising cost of both homeowners and flood insurance, it’s crucial to compare policies and find the best options. Insurance Direct Rates (IDR) offers an invaluable service for consumers looking to learn more about their coverage options and get access to free insurance quotes. For homeowners like Cara, Rae, Jillian, and Tabitha, IDR can help navigate the complexities of insurance policies and ensure that they get the protection they need at an affordable price. Visit Insurance Direct Rates to get more information and secure the best insurance for your home.

Helpful Link for Victims of Hurricane Helene

For more information and assistance, visit FEMA if you’ve been affected by the storm and need support.