OMAHA, Nebraska (WOWT) – With home insurance premiums rising, it’s becoming increasingly difficult to afford a home in Nebraska.
According to Insurify, home insurance in the Cornhusker State is almost twice as expensive as the national average.
“We’ve seen a trend, particularly in the last 12 to 18 months, of stronger growth than in the 36 years I’ve been an insurance agent,” said Amy Hruska, incoming president of the Independent Insurance Agents of Nebraska.
According to Hruska, an annual rate increase of about 5 to 7 percent used to be normal, but today the annual increases are between 10 and 30 percent.
One of the reasons for this is that insurance companies across the country and worldwide are having to pay out more compensation for natural disasters. Reinsurance rates, i.e. the insurance that insurance companies buy, are also rising worldwide.
“Insurance companies have to pay higher premiums themselves, and then they also have to pay out more claims, invest less or get better returns on the stock market, and then you have inflation. All of these things are like the perfect storm, and that’s why we’ve seen such big increases,” Hruska explained.
Compared to the rest of the Midwest, rates in Nebraska have increased significantly, which puzzles Hruska.
“I don’t really know why that is. I mean, we don’t have more flooding, hail or wind than Oklahoma, Kansas or Iowa, but in Nebraska the rate is just astronomical,” Hruska said.
According to Hruska, there are weak and tough market cycles in the insurance industry, and over time the situation will ease.
While this does not mean that insurance companies will lower their prices, they are willing to take higher risks and issue more policies.
Troy YoungBlood, a homeowner in West Omaha for 22 years, has experienced the impact of these skyrocketing prices firsthand.
“With the current inflation, we don’t eat out all the time, we don’t travel all the time, we don’t buy a new car every year. We just watch our money and pay for things we need, like insurance,” YoungBlood said.
Over the past few years, his home insurance premiums have increased by 9-13% annually, even though he switched companies a few years ago for a cheaper rate.
“We have to live with it. We want to keep our house fully insured, no matter what the value is, in case of a fire or a storm like the one we experienced. It would be completely replaced or we could at least rebuild it,” YoungBlood said.
Hruska offered advice for people looking to save money on their insurance policies in both the short and long term.
She recommends going over your insurance plan with your agent to make sure you’re not paying for something you don’t need. Also, consider bundling insurance to get discounts, considering a higher-deductible plan or reducing your risk of a claim through improvements like getting a new furnace or water heater.
Hruska said changing companies could also be considered, but warned against doing so too often.
“Insurance companies today find out quite quickly who is price-conscious and changes insurance company every year. They reward those customers who stay with the company longer because they build a longer term into their insurance premiums,” explained Hruska.
YoungBlood says he remains loyal to his agent, Lacey Brown of State Farm, largely because he trusts her advice.
“Relationships are very important to me, customer service comes first and that’s what I will pay for,” said YoungBlood.
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