Michigan homeowners are feeling the squeeze as insurance costs rise across the country and experts said the hike is driven by more severe weather, rising construction costs and growing damage claims.
Midwestern states like Michigan are seeing higher losses tied to wind, hail and flooding.
Andrew Hoffman, professor of sustainable enterprise at the University of Michigan, said during a recent webinar hosted by The Conversation on extreme weather and home values, rising insurance costs can ripple through the housing market.
“Between 2017 and 2023, 26 states saw their property insurance rates go up by 25% and four states – Texas, Colorado, Arizona, and Utah – saw the rates go up by 50% or more,” Hoffman reported. “That’s going to hit people hard.”
Hoffman pointed out insurers are increasingly worried about so-called secondary perils, including flooding, hail and severe storms which can cause repeated damage outside major disaster zones. At the same time, many homeowners do not fully understand their risk until after a storm.
Analysts said coverage is also changing, with some insurers raising deductibles or limiting payouts as weather losses grow harder to predict.
Jesse Keenan, associate professor of sustainable real estate and urban planning at Tulane University, said people considering a home purchase should do some homework before signing the papers.
“Talking to neighbors is always an important thing,” Keenan emphasized. “The rule of thumb I always tell people is drive by the house you want to purchase on a rainy day and go talk to your neighbors or prospective neighbors. You’re going to learn an awful lot about the underlying risks.”
Researchers say only about 6% of U.S. homeowners carry flood insurance, even though flooding is the nation’s most common natural disaster.
