Living in the path of a hurricane is bad enough, paying some of the nation’s highest property insurance rates makes it worse – so many aren’t.

In many of the biggest metro areas in the Southeast, households are less insured than they were eight years ago, according to Trulia analysis of government data.

As residents in Florida, Georgia and the Carolinas deal with the aftermath of Hurricane Matthew, many may be facing uninsured losses. The U.S. Census Bureau reported in 2014 that in that region’s biggest cities the number of insured households dropped between 7 and 12 percentage points.

For instance, percentage of Miami households reporting that they had homeowners property insurance fell to 78% in 2014 from 90% in 2006. The Tampa-St. Petersburg, Fla., saw the steepest drop, to 79% from 92%.

Major metros in the Southeast followed a national trend in which owner-occupied households reported that they did not carry homeowners insurance. Nationally the number of insured homes fell to 89.2% from 94.1% eight years ago. Almost all major southeastern U.S. metros had insured rates below the national average.

Hurricane insurance is often a supplemental policy in so-called Hurricane Alley states, but many companies require a standard homeowners policy for homeowners to buy it.

 

Why Are Homeowners Forgoing Property Insurance?

While homeowners can drop insurance for a multitude of reasons, there are two strong factors which may have contributed to the decline.

  • First, many mortgage companies require a homeowners policy as a condition of the home loan. Some homeowners who pay off their mortgages decide to forgo insurance usually because…
  • Homeowners insurance is expensive and has become more expensive during the last eight years, with premiums climbing 28.2% nationally. Ten of the 25 most expensive markets for homeowners insurance are in the Southeast.

What is clear is that proportion of homeowners that have a mortgage obligation has been in decline since the crisis through 2014. In 2006, 68.2% of households that owned a home were paying back their mortgage. In 2014, that number stood at 63.8%, which represents a 4.39 percentage-point decrease throughout the country. This steady decline might be explained by a combination of the following: the effects of mortgage defaults from the crisis eventually showing up in the data, stricter lending standards post-crisis, and those who used to owe a mortgage paying having successfully paid back their mortgage in full.

In 2014, 94.7% of homeowner households that had outstanding mortgage obligations had property insurance. On the other hand, only 75.5% of those homeowner households that did not have any mortgage, representing a drastic 19.23 percentage-point difference between households that still have to pay back their mortgage and those that do not owe a mortgage.

Ultimately, short-term savings from cancelling homeowners insurance can have long-term consequences. And regions that have suffered the worst Mother Nature can throw are willing to pay a premium to keep their investment safe. The New Orleans metro, hammered by Hurricane Katrina in 2005, has among the highest insured rates in the country with 90% of households insured – even though rates there have jumped 30%.

U.S. Metro Median Annual Property Insurance Cost, 2006 Median Annual Property Insurance Cost, 2014 % Change in Property Insurance Cost, 2006-2014 % of Homeowner Households That Have Property Insurance, 2006 % of Homeowner Households That Have Property Insurance, 2014 %-Point Change in Homeowner Households That Have Property Insurance, 2006-2014
Miami-Miami Beach-Kendall, FL $2,128 $2,000 -6% 90% 78% -11.92
New Orleans-Metairie, LA $1,383 $1,800 30% 93% 90% -2.97
West Palm Beach-Boca Raton-Delray Beach, FL $1,916 $1,800 -6% 91% 82% -9.70
Fort Lauderdale-Pompano Beach-Deerfield Beach, FL $1,809 $1,600 -12% 91% 80% -10.95
Nassau County-Suffolk County, NY $1,064 $1,500 41% 98% 93% -4.59
Oklahoma City, OK $1,064 $1,500 41% 93% 87% -5.54
Cape Coral-Fort Myers, FL $1,383 $1,400 1% 94% 82% -12.12
Houston-The Woodlands-Sugar Land, TX $1,277 $1,400 10% 92% 87% -4.57
North Port-Sarasota-Bradenton, FL $1,277 $1,400 10% 94% 82% -12.25
Tampa-St. Petersburg-Clearwater, FL $1,277 $1,400 10% 92% 79% -12.39
Baton Rouge, LA $958 $1,300 36% 87% 84% -3.38
Bridgeport-Stamford-Norwalk, CT $1,064 $1,300 22% 98% 91% -6.18
Charleston-North Charleston, SC $1,064 $1,300 22% 93% 86% -7.33
Dallas-Plano-Irving, TX $1,277 $1,300 2% 95% 91% -3.64
Tulsa, OK $905 $1,300 44% 93% 86% -6.16
Boston, MA $905 $1,200 33% 97% 91% -6.08
Deltona-Daytona Beach-Ormond Beach, FL $947 $1,200 27% 93% 83% -10.26
Fort Worth-Arlington, TX $1,171 $1,200 2% 94% 88% -5.51
Jacksonville, FL $851 $1,200 41% 95% 86% -8.72
Minneapolis-St. Paul-Bloomington, MN-WI $841 $1,200 43% 97% 91% -6.34
Orlando-Kissimmee-Sanford, FL $958 $1,200 25% 95% 87% -8.14
Wichita, KS $873 $1,200 37% 94% 88% -6.16
Austin-Round Rock, TX $851 $1,100 29% 95% 91% -4.11
Colorado Springs, CO $787 $1,100 40% 97% 91% -5.46
Denver-Aurora-Lakewood, CO $851 $1,100 29% 97% 92% -5.39

Methodology

We use 1-Year 2006 through 2014 U.S. Census American Community Survey data to calculate the share of homeowners who are actively paying homeowners insurance.