Is a bad winter to blame for homeowners insurance hikes in Massachusetts?
That’s what homeowners and their insurance companies are saying after record-setting storms and snowfall left damage throughout the state. Massachusetts residents have now complained of a 9% rate increase on their homeowners policies, bringing the average cost of a policy in the state to about $1,150.
The state’s Division of Insurance approved the 8.9% increase for the largest insurer in Massachusetts, Mapfre USA Corp., which will take effect on August 1.
Last year, that increase was only 2.3%, affecting around 214,000 homeowners in the state.
Customers of Safety Insurance Co., which protects about 150,000 homeowners, will see a 9.1% increase on their home policies in December.
For the most part, the increases stem from the extreme weather and the damage it did to roofs, walls, and other parts of houses.
One homeowner’s damage was so bad that he needs ceilings, walls, and floors replaced throughout his home. Worse, however, is that his insurance company will only pay about one-tenth the true price of the repairs.
Most insurers, though, paid an average of $100,000 per claim. These were largely due to ice dams, according to the Boston Globe, which is caused by snow on roofs melting then freezing again, preventing proper drainage.
As one insurer explained, it’s common for companies to look at weather trends over periods of several years before deciding on their rates. This differs from car insurance, which may use something like the age of the driver if over 70 or under 25 as a factor in determining premiums.
But is snow entirely to blame for the insurance hikes?
Even in Texas, homeowners are seeing increases between 7% and 8%, especially in the Dallas area. While Texans in metropolitan areas may have homes similar to those found in Massachusetts, they also might need farmers home insurance policies in more rural areas.
The highest rates in Dallas-area zip codes were found in Arlington: $1,754 premiums for a home insured for $150,000. Plano’s cost was lower but was still around $1,400.
The most expensive insurer in the state was State Farm Insurance, usually offering the highest or second-highest premiums out of 33 total insurers.
As for Massachusetts residents, the governor says he will look into it, but that the rates are likely to hold.