June 14, 2021

Severe weather causes continued rise in homeowners insurance premiums

Homebuyers in a hot real estate market are encouraged to shop and compare policies

Jefferson City, MO – Severe weather trends in the Show-Me State have resulted in the continued rise in insurance premiums as consumers shop for homes during an unusually hot real estate market.

A recent report issued by the Missouri Department of Commerce and Insurance states that homeowners insurance claims have increased at a steady pace resulting in increased premium rates for consumers. 

“Missouri has had a pretty bad streak of weather for the last 20 years,” said Chlora Lindley-Myers, director of the Department of Commerce & Insurance (DCI).

Analysis of premium and losses data by DCI staff shows that an increase in insurance claims by homeowners has required insurance companies to raise their rates. The most significant loss category for Missouri residential property claims can be attributed to wind and hail damages.

“It is clear from the data that the primary driver of homeowners insurance cost increases are weather-related losses,” said Lindley-Myers. “The pre- and post-2001 periods appear pretty stark when you look at the reports.”

The most tragic example of a severe weather loss was when Missouri caught the attention of the entire nation on May 22, 2011, after an EF-5 tornado struck Joplin, Mo. This deadly tornado traveled on the ground for approximately 22 miles killing 158 people. This severe weather loss caused over $2 billion in Missouri property losses incurred with over 19,800 insurance claims filed. 

More recently, a series of tornadoes struck Missouri and parts of Oklahoma on the eighth anniversary of the Joplin tornado. On May 22, 2019, one violent tornado touched down in Jefferson City, Mo., just before midnight, injuring nine people. This severe weather loss caused over $189 million in Missouri property losses with over 6,400 insurance claims reported.

Although Missouri residents can’t do anything about the weather—they can take some steps to potentially help their pocketbooks and be better prepared.

“We recommend consumers regularly review their insurance policies,” said Lindley-Myers. “Does your current homeowners policy cover the cost to rebuild or repair your home if you are a victim of severe weather? You should also know that most homeowners policies do cover wind and hail damage—but most policies exclude flood damage, for example.”

Many Missouri real estate markets are currently experiencing high demand for homes along with low interest rates. The Department of Commerce and Insurance recommends that homebuyers should shop around to find companies and policies that best suit their insurance needs as they purchase their new homes. 

The Department of Commerce & Insurance (DCI), protects Missouri consumers through our oversight of the insurance industry, banks, credit unions, various professional licensees and various utilities operating in the state. DCI’s strategic priority is to educate and advocate for Missourians as well as regulate fairly and impartially the industries and professionals under our purview.