…and the good news is premium growth slows – but Mississippi and Alabama still paying more for insurance

Post-Katrina homesite, Mobile Press Register

Jeff Amy covered both bases with similar stories in both the Pascagoula and Mobile editions of the Press RegisterAlabama homeowners, according to Army’s story, have gone from paying 10 percent less than the national average in 2002 to 10 percent more in 2007.

“Satisfied is probably not the right word, but we’re comfortable with where we are compared to the other coastal states,” said Alabama Insurance Commissioner Jim Ridling.

Of course he’s comfortable,  look at what happened to the homeowners next door in Mississippithe State went from paying 13 percent more than the national average in 2002 to paying 24 percent more in 2007.

Mississippi’s not so comfortable Insurance Commissioner Mike Chaney told Amy “Rates are going to continue to go up in Mississippi.”

Though the data isn’t in, Chaney said he thinks rates also rose in 2008 and 2009 because of increases granted in 2007 to Allstate and Nationwide.

“I think we’re going to track the national average in 2008 and maybe be a little higher,” Chaney said.

Amy’s stories included information released by NAIC similar to that SLABBED reported in Go figure! Mississippi has nation’s seventh-most-expensive homeowners insurance and lowest median household income

Besides comparing the states on average premiums, the survey gives an idea of how much people pay per dollar of insurance coverage and the bite that insurance payments take from family income.

It found the typical Mississippian bought between $125,000 and $150,000 of homeowners coverage in 2007. To secure that coverage, insurance customers in the state paid as much as 81.5 cents per $100 of coverage, the fifth-highest rate in the country. Louisiana, where the typical policyholder paid $1.12 per $100 of coverage, had the nation’s highest rate.

Nationwide in 2007, a homeowners policy cost 1.22 percent of median household income. In Mississippi, it cost 2.16 percent, fourth-highest in the nation.

…the typical Alabamian bought between $150,000 and $200,000 of homeowners coverage in 2007. To secure that coverage, insurance customers in the state paid as much as 60.3 cents per $100 of coverage, the ninth-highest rate in the country.

First, fourth, and ninth in the nation when states are ranked on homeowners policy cost as a percent of median household income translates to a big bite out of household income in Louisiana, Mississippi and Alabama.

Ouch!

It was the first time in five years that Alabama’s premiums rose by a smaller percentage than those nationally. State homeowners have gone from paying 10 percent less than the national average in 2002 to 10 percent more in 2007.

“Satisfied is probably not the right word, but we’re comfortable with where we are compared to the other coastal states,” said Alabama Insurance Commissioner Jim Ridling.

Policyholders, though, are still feeling the pinch. Leo Gayle, a Whistler resident active in the Homeowners’ Hurricane Insurance Initiative, said more and more people are going without insurance.

“A lot of people can’t afford to cover their homes,” Gayle said.

2 thoughts on “…and the good news is premium growth slows – but Mississippi and Alabama still paying more for insurance”

  1. Nowdy, it is the same old dilemma. If one lives on the coast it is going to cost more for insurance. There is really no logic in relating the cost of insurance to per capita income. As I have stated many times, the Gulf Coast is not like most coastal areas in the Southeast USA. The only close comparison would the native populations of Beaufort or Charleston, SC. The population is comprised of a lot of blue collar type workers. This obviously puts price pressures on those folks for insurance.

    The only solution is subsidies for these folks and not many folks who would finance the subsidies are interested in doing that.

  2. The Mississippi windpool is already beinmg subsidized Sup. The state can’t let insuirers kill their economic bellcow. Eventually they’ll have to let the windpool underprice the dysfunctional private market completely via building meaningful reserves. It is important to remember the average joe electes the politicians here not a price gouging Bermudan reinsurer or State Farm.

    Beaufort is a beautiful place, I highly recommend it as a vacation destination.

    sop

Leave a Reply

Your email address will not be published. Required fields are marked *