According to their survey on the most expensive states for homeowners insurance costs, Forbes magazine ranks Florida number six in the country. The survey is based on the National Association of Insurance Commissioners most recent study of insurance premiums, drawn on 2005 data due to lags in state reporting procedures.

Multiple factors are used in the analysis, not necessarily just the threat of a single disaster. Hurricanes, tornados, and floods make the headlines, but hail and wind cause more damage on average. Building costs are another important consideration. Insurance typically pays out at replacement cost (the amount it would take in labor and materials to replace/rebuild the property) and the rising costs of such items are eventually reflected in the costs an insurance company must pay for repairs. Accordingly, states where Mother Nature is usually unkind tend to have the highest average annual insurance costs.

This year’s top ten most expensive states included:

• Texas - $1,372
• Louisiana - $1,144
• Oklahoma - $1,030
• District of Columbia - $963
• Mississippi - $939
• Florida: $929
• California: $895
• Rhode Island: $849
• Alabama: $847
• Kansas: $836

Many states have set up insurers of last resort in order to help with rising costs. Florida’s Citizens Property Insurance Corporation, which is underwritten by tax dollars, holds the biggest market share in the state. Many experts say if the numbers reflected in its policies where included in the study’s reported premiums, Florida would be the most expensive state in the country bar none.

Fortunately, Florida’s state government has been very proactive over the last year in fighting to help keep insurance costs down for everyone. Recent changes in the law have forced insurers to lower premiums and the regulatory agencies are taking a much stronger stand against requests for rate hikes. A new Insurance Bill of Rights was recently enacted and a substantial number of smaller insurers have entered the Florida market. Hopefully, Florida residents will begin to see an easing in their ever rising insurance costs as a result.

Tags: Florida, homeowner insurance