Home insurance costs are rising yearly, putting a toll on every homeowner. Over the past five years, home insurance premiums have increased by 34 percent nationwide, leading many individuals to cut back on other expenses.
Due to rising premium prices, many homeowners opt out of home insurance, which poses a potential risk to individual homeowners, communities, and national housing stock. According to a survey, over 6 million homeowners do not have home insurance, accounting for 7.4 percent of all homeowners in the country. The value of these uninsured properties is estimated at around $1.6 trillion.
Claimguide.org conducted a survey comparing all the states in America to know which state has the most uninsured homeowners and the top 13 states in the survey are:
Mississippi
Mississippi topped the list with 178,476 homes without insurance, accounting for 13.3 percent of its 1,342,764 homes. This raises a concern as it is the most affected state by natural disasters, and lack of insurance coverage leaves homeowners vulnerable to financial devastation in the event of natural disasters.
In 2023 alone, the state experienced 77 Tornadoes, causing extensive property damage. Without insurance, homeowners are forced to cover all expenses themselves, without receiving any coverage.
New Mexico
New Mexico has 123,718 uninsured homes or 12.9 percent of the total. The primary reason for this lack of insurance coverage is economic challenges, as the state has a poverty rate of over 17 percent, the fourth highest in the country. This is problematic because the state is prone to many natural calamities.
In 2022, New Mexico faced the worst wildfire in its history, which burned over 300,000 acres in a few minutes. Hundreds of people lost their homes in this calamity without any resources to rebuild. With insurance coverage, they would have had the financial support needed to recover from such events.
West Virginia
West Virginia ranks third among the most uninsured homeowners, with 105,729 homes without insurance coverage, accounting for 12.3 percent of the total homes. The primary reason is the economic challenge, as the state has the third-highest poverty rate of 17.9 percent. Additionally, West Virginia is prone to floods, landslides, subsidence, and groundwater hazards, leaving uninsured homeowners vulnerable to significant financial burdens in a natural disaster.
Louisiana
Rising home insurance premiums have become a pain for homeowners in Louisiana. The state ranks eighth in the highest home insurance costs, resulting in 12 percent of homeowners going without insurance. Additionally, the state has the second-highest poverty rate in the nation, contributing to the low rate of home insurance coverage. It is also highly susceptible to floods and hurricanes, which drive up insurance premiums, making coverage less affordable for residents.
Alabama
In Alabama, 10.6 percent of homeowners lack home insurance coverage, leaving 248,005 out of 2,339,582 homes uninsured. The state’s relatively low median household income makes it difficult for many homeowners to afford insurance. This poses a significant risk, as the state is prone to natural disasters like earthquakes and tornadoes, which can lead to financial strain for residents in the event of a calamity.
Alaska
Alaska ranks sixth, with 10.2 percent of homes uninsured, totalling 33,417. The state’s harsh geographical conditions make it prone to natural disasters, such as earthquakes, volcanic eruptions, and landslides. These frequent events drive up insurance premium costs. However, not having house insurance in such areas can be economically devastating, as seen in the Anchorage earthquake in 2018 and the Great Alaska earthquake in 1964.
Kentucky
Kentucky has 203,236 uninsured homeowners, accounting for 10 percent of all homeowners. The primary reason for this is the high cost of premiums. The state’s high poverty rate and low median household income make it difficult for residents to afford home insurance. Additionally, homeowners in rural areas are less inclined to purchase home insurance, leading to a high rate of uninsured homeowners in the state.
Oklahoma
Oklahoma has 177,260 uninsured homeowners out of a total of 1,776,732. One key issue is the highest average annual home insurance premium and low median household income, which contribute to the low insurance coverage in rural and urban areas. This is particularly concerning as the state is prone to tornadoes and floods, making it challenging for uninsured homeowners without insurance to manage the cost of rebuilding houses in case of natural calamities.
Wyoming
Wyoming ranks ninth, with 27,638 uninsured homes, representing 10 percent of the state’s total. The rising cost of insurance premiums due to severe weather events and inflation has led to decreased interest in purchasing home insurance. Additionally, the state’s rural nature and lack of awareness about the importance of home insurance leave many homeowners without insurance coverage.
Florida
Around 1,014,102 houses are uninsured in Florida, equivalent to 9.9 percent of the total 10,257,553 homes. Since 2020, insurance rates in the state have doubled and tripled, affecting the budgets of many residents. To reduce this cost, many homeowners cut out specialized insurance, like hurricane coverage, leaving them vulnerable to the devastating financial aftermath of such natural calamities. Raising awareness about the importance of home insurance is essential to protect from unpredictable weather events.
South Carolina
In South Carolina, 9.8 percent of homeowners lack insurance, equating to 239,128 houses out of a total of 2,446,680. The state is at significant risk of various natural calamities, including fire, flooding, hurricanes, lightning, high winds, and earthquakes. The lack of home insurance can pose a significant risk for homeowners, highlighting the need for greater awareness regarding insurance planning among residents.
North Dakota
With 36,517 uninsured homes, North Dakota ranks twelfth on the list. Home insurance in the state is more expensive than the national average per year, making it economically challenging for people to afford. Almost 9.7 percent of homeowners don’t want to insure their homes, which raises concerns as they may face financial burdens in case of a mishap.
South Dakota
South Dakota has 9.6 percent uninsured homeowners, accounting for 39,144 homes. Although the state is not as prone to natural calamities as some others, having home insurance protects against sudden financial strain due to weather or other events.