Miami Insurance Rate Rises On High Risk
Home insurance is based almost exclusively on risk. Some of these are construction and home age. In most areas, risk has a weather component. In the US, that is mostly wind, flood, wildfires and hurricanes. People who live in areas prone to these weather events pay higher premiums than the national average.
Insurify made a comparison between home values and insurance levels, based on absolute dollars. The numbers were used to create a ratio. The higher the ratio, the larger the insurance payment is in comparison to the home value. The national average among the top 100 markets is .5%.
Miami is at the head of this at 3.7%. New Orleans is a close second at 3.7%. The home values are very different. Miami’s is $614,000. The median insurance rate is $22,718. One problem with the market is that it is hard for some people to afford both mortgages and insurance. In New Orleans, home prices are significantly lower than the national average, at $231,328. Insurance rates are $8,328. Obviously, much of New Orleans is below sea level, and there is the cost of Katrina as a benchmark.Â
New Orleans
Five of the top ten markets based on the high ratio are in Florida. Two are in Louisiana. It shows the effects of hurricanes on risk.
One of the challenges is that risk mitigation for these cities is nearly impossible. A large portion of Miami is at or below sea level. The city can build barriers against rising seas and storm surges. They may work from time to time. However, global warming is pushing sea levels higher.
Miami may top this list as long as it is published.
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