Orange Beach, Ala. – (OBA) – According to BankRate analyst, the average homeowners insurance premium has jumped 23% since January 2023. Insurance companies have also adjusted coverages for both primary and vacation home properties. But Alabamians can be thankful they are not insuring in the States of Florida or Louisiana, where some people have seen home insurance rates rise over 50%.

Several factors are making homeowners insurance more expensive: The increase in the number and severity of hurricanes, floods, tornadoes and other harsh weather has led to a spike in claims in many parts of the country. The 2023 Atlantic hurricane season ranks 4th for most-named storms in a year. In the western U.S., drought and heatwaves have led to “extraordinary wildfire seasons,” according to the National Oceanic and Atmospheric Administration.

Another factor for rising rates include higher construction cost, making repairs more costly. Since 2020, residential building costs have risen almost 28%, according to an analysis that also found labor costs jumped nearly 12%.

In case you think insurers are raking in large profits, the insurance industry as a whole has taken a hit. In the first nine months of 2023, State Farm, the largest home insurance provider in the US, reported a record loss ratio of 84%, according to S&P Global. That represents an increase of more than 20% from 2022.

This month BankRate published their Average Homeowners Insurance Cost report for the nation. Based on a dwelling coverage amount of $300,000, Alabama did rank $515 above the national average, but Florida experienced a $3,303 difference from the national average.

It may feel like the factors fueling the rate hike are out of your control. However, there are still ways homeowners can lower their monthly premiums. 

While most insurers consider the same factors when calculating premiums, they weigh them differently. So it pays to get quotes from at least three other providers. You can look for carriers that are financially solid and able to pay out claim benefits — usually ones with an A+ or A++ grade from A.M. Best, the insurance industry’s leading credit rating agency.

See if you need all the coverage you’re paying for. To estimate how much insurance you need, you need to know the cost of rebuilding your home. Check with a local real estate agent or builders about per-square-foot building costs. Then multiply that figure by the total square footage of your home.

Many insurers offer bundling discounts for taking out both home and auto policies from them. In addition to potential savings, you can enjoy the convenience of accessing your policies through the same app or website. You can review your deductible amount during the negotiations with the insurer.

According to the Alabama Department of Insurance, "There is a good chance your current or prospective insurance company is looking at your credit." Therefore, it is a good idea to review your credit history to make sure it's accurate.

Hopefully, Jim Cantore will not be visiting the local beaches anytime soon!