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Riskiest areas see fewer homes insured as premiums rise | Bedford Hills Real Estate

As Florida and the Carolinas begin digging out from the from the record flooding and high winds that Hurricane Matthew delivered over the weekend, thousands of homeowner insurance claims are sure to follow.

The Consumer Federation of America, a Washington D.C.-based consumer advocacy group expects about 100,000 homeowners to file damage claims for as much as $7.5 billion from the Category 3 storm, though well short of the record claims made from the most severe storms such as Hurricane Katrina or Hurricane Andrew, where damage claims were more than $100 billion.

But if it turns out that fewer-than-expected insurance claims will be filed for damage, it may not just because Hurricane Matthew was a less-powerful storm than expected, it may be because far fewer homeowners are carrying property insurance.

That’s the analysis from Trulia.com, a San Francisco-based real estate research firm, which looked at homeowners’ insurance rates in some of the most hurricane-prone regions of the Southeast and mid-Atlantic, the so-called southernmost “Hurricane Alley” states comprised of Florida, Georgia and the Carolinas. The study also looked at Gulf Coast insurance rates including Texas. Hurricane insurance is often supplemental, but is typically required by mortgage lenders if the home is located in a storm-prone market like Florida.

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Overall, the U.S. Census noted that in 2014, 94.7% of homeowner households that had outstanding mortgage obligations had property insurance. The property insurance rate however dropped to 75.5% of those homeowner households that did not have any mortgage.

While property insurance is typically required by banks to protect their investment while the mortgage is being paid, Trulia’s data shows that many homeowners are dropping insurance once the mortgage is extinguished, primarily due to cost.

The percentage of Miami households reporting that they had homeowners’ property insurance fell to 78% in 2014 down from 90% in 2006, according to U.S. Census data cited by Trulia. Tampa-St. Petersburg, Fla., saw the steepest drop in insured homes, to 79% in 2014 from 92% in 2006, Trulia said.

Nationally, the number of insured homes fell to 89.2% from 94.1% eight years ago. Almost all major southeastern U.S. metros had insured rates below the national average, Trulia said.

On a national basis, Trulia noted that premiums have climbed on average more than 28%, with 10 of the 25 most expensive markets for homeowners insurance in the Southeast.