State Farm insurance agent James Carlton predicts Missouri homeowners will continue to pay hiked homeowners insurance rates this year, the Webster-Kirkwood Times reported. Homeowners — if they haven't been dropped by insurance companies yet — would then be forced to choose between paying these higher premiums or risk living without homeowners insurance.
What's happening?
In the last three years, Missouri experienced an average of nine weather or climate disaster events per year, according to data from the National Centers for Environmental Information.
The Show-Me State endured 20 severe storms, one tropical cyclone event, two winter storm events, and drought conditions throughout the state over the last three years alone. These weather events have accumulated between $5 billion to $10 billion in losses, representing 15% of the total cost of losses caused by climate events between 1980 and 2024, per the NCEI.
In addition to the increased frequency of natural disaster events in Missouri, homeowners insurance rates are also influenced by rising construction costs, which makes it more expensive to rebuild and recover building structures after damage.
To top that off, the prices of homes have skyrocketed since the pandemic. The average Missouri home value has increased 47% since 2020, according to home value data on Zillow. The increased value of homes plays a role in increased homeowners insurance rates.
Why is this important?
"Weather is going to continue to impact the home insurance industry as prices will need to rise to remain solvent, as well as higher deductibles may be required in the future," Carlton said, according to the W-K Times.
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While the climate events affecting homeowners in Missouri are different from those events affecting homeowners in California, the fact of the matter is that homeowners insurance rates are rising nationwide, much in part due to climate events.
Human activity, including the burning of dirty energy sources for fuel and deforestation, exacerbates planet-overheating pollution and rising global temperatures, bringing about more frequent and more severe climate events that endanger communities and cause insurance companies to drop coverage in high-risk areas. And even in areas where coverage remains available, homeowners face hiked insurance premiums that not everyone can afford.
One Missouri senior, living on a fixed income, was forced to sell their house due to increased property taxes (7.7%) and homeowners insurance rates (50%). Engaging on a post shared in the r/Missouri subreddit asking about hiked homeowners insurance prices, the commenter said, "I rent now. … I can't afford a home anymore."
What can be done about rising homeowners insurance?
Although homeowners should expect increased homeowners insurance prices this year, homeowners still have a choice with whom they want to shop.
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Definitely 👍 Carlton recommends that homeowners shop around for plans that cover their needs and fit their budgets. He said homeowners in East-Central Missouri may want to pay attention to earthquake coverage, for example. This could even be purchased as a standalone coverage.
"Not all home policies are created equal," Carlton said, per the W-K Times.
Homeowners should also take into account an insurance company's customer service and response to claims when shopping for new plans.
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