Home Schooling

Homeowners in states hit hard by this spring’s tornadoes have some of the highest average insurance premiums. Louisiana’s average annual premium is $1,155 and Mississippi’s is $980; in Alabama it’s $845, and in Missouri, $788 – which is about the national average of $791. That’s the average-of course, homeowners in high-risk areas within all states are likely charged more than the average.

The fact that risk-based insurance premiums may be higher in storm-prone states should not be a surprise. But a few of the states hurt by this year’s barrage of deadly tornadoes are also among the states with the highest rates of homes not paying anything for insurance-those without hazard insurance protection, according to a study by The Associated Press. The South has the highest rate of homes without hazard insurance, at 17.4 percent, according to the AP analysis.

Mississippi ranks second in the nation for the percentage of homes without insurance covering wind damage with about 30 percent of owner-occupied homes lacking such coverage, according to the AP. At the same time, Mississippi is fourth on the list of states that have had the most tornadoes in the past five years. Arkansas ranks fourth for uninsured homes and 10th for being tornado prone.

According to the AP study, some of the same states with high percentages of houses without insurance have high rates of houses without mortgages as well. In Mississippi, 43 percent of homes have no mortgages. Since mortgage lenders require insurance, it makes sense that these states might lag in insurance coverage.

The AP research suggests there is room for improvement in terms of educating these homeowners in particular about insurance. This, of course, begs the question of whether the insurance is even available on some of these structures in high-risk areas. They are often older houses.

A concerted joint public-private effort to identify available insurance markets and educate homeowners would help. The program could target owners of older homes and homeowners without mortgages. The affordability of coverage is always going to be an obstacle for some, but for others, a lack of awareness of where to get coverage could be part of the problem.

Another response would be for the government to require homeowners to carry minimum hazard insurance, much the same as mortgage lenders do. But given the uproar over the federal health insurance mandate, politicians are unlikely to get near this idea.

Perhaps improved take-up rates for hazard insurance will be among the positives that emerge from the recent tragedies.

Topics Homeowners Mississippi