I was reading an article on AOL today about homeowner costs by state and I was not so shocked to find that Louisiana rates among the highest in homeowner insurance rates. They aren’t the highest. That position is held by Texas and the reason seems to be that Texas is vulnerable to just about every type of major disaster that could effect homeowners insurance. They are immune to nothing. Louisiana has risen in the past 5 years because of the succession of devastating hurricanes that have hit or affected the area. Florida also runs high because of their history with hurricanes. States like Oklahoma have higher than normal costs because of the tornadoes that have historically affected their areas.
I guess what I have been led to wonder is why there is a difference. Every state in the nation has some sort of weather condition or disaster that would affect its insurance usage. The whole point of having insurance is that it will help to replace lost property if one of these events occurs. So why do the prices go up when these events occur. Now I have a minor in Economics. I understand enough to know that the insurance companies make money because they hedge their bets on the fact that most people would never need to use the insurance. I think that is great. I have the piece of mind of knowing I may never need it but I have it if I do and the insurance company has years of my money where they never need to give any back to me. So why then does it become a problem or bring about rising insurance costs when the times come where they needed to used? Makes no sense.
Unfortunately those who have had to use their insurance know that it is way more important to have it and not need it than it is to need it and not have it. We have never had to use it on a major scale but it is certainly reassuring to know it is there if we do. Hurricane season is just about here. Now is the time to reevaluate your coverages and make sure you have everything in line just in case you might end up needing to call on your insurance to put your life back together.
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