More Homeowners Claims Equal Higher Insurance Prices in Missouri

Severe weather trends causing an increase in claims are impacting the price of homeowners insurance in Missouri, regulators say.

A recent report, Missouri Homeowners Insurance — Premium & Losses, by the Missouri Department of Commerce and Insurance shows that a steady increase in homeowners insurance claims has resulted in higher premium rates for consumers.

“Missouri has had a pretty bad streak of weather for the last 20 years,” Chlora Lindley-Myers, director of the Department of Commerce & Insurance (DCI), said in a media release.

Since 1998, the average nominal homeowners premium for all limits has risen from $451 to $1,453 in 2020. The average nominal homeowners premium with policy limits of $100,000 to $140,000 rose from $448 in 1998 to $860 in 2020, the report shows.

Premium and loss data show that an increase in insurance claims by homeowners is driving the rise in rates. The most significant loss category for Missouri residential property claims can be attributed to wind and hail damages.

“It is clear from the data that the primary driver of homeowners insurance cost increases are weather-related losses,” Lindley-Myers said. “The pre- and post-2001 periods appear pretty stark when you look at the reports.”

Lindley-Myers noted the EF-5 tornado in Joplin on May 22, 2011, not only caused the deaths of 158 people but also resulted in over $2 billion in property losses and more than 19,800 insurance claims. More recently, an extremely powerful tornado touched down in Jefferson City just before midnight on May 22, 2019, injuring nine people. It caused more than $189 million in Missouri property losses with more than 6,400 insurance claims reported.