We are always happy to get feedback from our customers – but over the past year or two a lot of you have been asking why property insurance in Nebraska – both homeowner’s policies and commercial coverage – seem so expensive.
The truth is that several interconnected factors are behind these high rates, and before you switch to a risky cut-rate carrier, it’s worth taking a look at what those root causes are.
Construction Costs
It’s no secret that the cost of both materials and labor for construction have ballooned in the first half of this decade – and this is an issue nationwide. This affects property insurance rates directly. If the cost to repair or replace your home goes up but your coverage amounts don’t, you won’t be fully protected if you have to file a claim. Insurers have to raise rates to keep up with appreciating home values and the higher levels of necessary coverage.
Nebraska Real Estate Market Dynamics
Another factor contributing to rising property values in Nebraska is actually an overall positive for homeowners: real estate market dynamics. As populations grow in cities like Omaha and Lincoln, increased competition for housing can drive up property values, further affecting insurance costs. But housing demand is strong across the state – simply put, people want to live here! And its hard to blame them. Increased property values means homeowners hold more wealth – but it also can contribute to higher premiums to protect that wealth.
Severe Weather Vulnerability
One major influence to high insurance costs in Nebraska is the state’s vulnerability to severe weather events, including tornadoes, hailstorms, and flooding. Nebraska is located in “Tornado Alley,” which increases the risk of significant property damage during storm season. Additionally, it is one of the highest risk states for hail damage. Severe weather events have become more frequent in the state, and insurers account for these risks in their pricing, leading to higher premiums for homeowners who need comprehensive coverage against such natural disasters.
Options for Homeowners
Nebraska’s severe weather risk, strong real estate market, and rising nationwide construction costs all have their effect on coverage. Together, these factors create a landscape where homeowner’s insurance can be more expensive in Nebraska compared to other states. This should also show that carrying complete coverage is more essential for homeowners than it has ever been. Bargain basement coverage and unresponsive agents can leave you facing inadequate repairs and ultimately risks destroying the value of your greatest asset – your home.
Local agencies have local knowledge, and are better equipped to find the coverage that protects you best. Plummer Insurance offers products from many insurers, and we are always happy to talk options with you.