Oklahoma weather gives it the highest homeowners insurance in the US

Homeowners insurance is still on the rise, on a rocket, really, in Oklahoma, which already had the most expensive coverage in the nation.

It costs $5,858 per year for $300,000 worth of coverage with a $1,000 deductible, more than double the national average of $2,601, according to fresh statistics from Insurance.com, an online insurance information provider and marketplace.

In Oklahoma it comes to $499 a month, compared with $217 a month nationally. That’s a 10.2% hike over last year here, compared with a 6.8% increase for the nation.

As familiar as longtime Oklahoma homeowners may be with the high cost of insurance, newcomers to the state are often dismayed by the unexpected extra expense, said Vanessa Johnson, an agent with eXp Realty and president-elect of the Oklahoma City Metro Association of Realtors.

“Out-of-state clients often encounter sticker shock when they see insurance rates in Oklahoma. The increasing costs of insurance are widely recognized among Oklahomans,” Johnson said “It’s a conversation we prioritize before property viewings because these expenses can significantly influence a buyer’s budget and potentially limit their options within certain price ranges.”

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High homeowners insurance is part of the cost of owning a home in Oklahoma

Rates vary based on the prevalence of severe weather — damaging winds, tornadoes, hail, wildfires and, of course, hurricanes where they hit — as well as what goes into a standard policy. Earthquake insurance, for example, is not part of a standard insurance package and must be acquired as a rider paid for separately.

For an individual home, other factors also come into play, such as population density, nearness to woods, a dangerous road or intersection, proximity to a fire station or fire hydrant, the level of crime and the claims history for the particular area, according to Insurance.com.

Average costs for homeowners insurance per $100,000 worth of coverage in Oklahoma, where Insurance.com says it is most expensive.

Costs for homeowners insurance by level of coverage in Oklahoma, according to Insurance.com:

• $200,000 in coverage: $4,442 annually, or $370 per month.
• $300,000 in coverage: $5,858 annually, or $488 per month.
• $400,000 in coverage: $7,012 annually, or $584 per month.
• $600,000 in coverage: $8,426 annually, or $702 per month.
• $1 million in coverage: $8,865 annually, or $749 per month.

RELATED:What to know about earthquake insurance in Oklahoma

Why homeowners insurance rates are rising in Oklahoma and everywhere else

The rising risks of disasters is sending homeowners insurance sky high, where most of the greatest perils originate, according to CoreLogic, a financial, property and consumer information provider.

“In 2023, the U.S. found itself amidst a property risk crisis, underscoring a disconnect between insurance policy pricing and the escalating risk properties face from natural catastrophes,” CoreLogic said in its 2024 Severe Convective Storm Risk Report. The once named “secondary” perils have arrived at the forefront of risk management decisions. Severe convective storms, or severe thunderstorms, in particular caused tens of billions of dollars of insured losses across the United States — with hail dominating the loss landscape.”

CoreLogic said that hail 1 inch or larger hit more than 10 million single- and multifamily homes in the lower 48 states last year, but more than half of those homes were in just five states: Texas, followed by Colorado, Illinois, Oklahoma and Missouri.

“The 2023 hail season was the most active in the past two decades, but hail alone does not create risk,” CoreLogic said. “The combination of the highly active and intense hail season with migration patterns across the U.S. and higher construction material and labor costs created a new scenario that carriers across the country will need to consider in future risk management decisions.”

From the Oklahoma Insurance Department:Consume information on homeowners policies

Homeowners insurance is going through the roof, which may not be covered

Rising insurance costs aren’t the only thing leaving homeowners cold, especially recent buyers, said Jennifer Arsenault, managing broker of Flotilla Real Estate Partners in OKC.

“Oklahoma property insurance price increases are actually far worse than most realize,” she said “I taught about this in the brokerage this week because we are seeing more insurance companies deny roof claims, which causes the deals to fall apart, buyers losing money on inspections and appraisals, and having to start all over. 

“It’s important to note that the traditional flat fee deductible is being phased out. The more prevalent 1% deductible is now transitioning to a 2% deductible, which could have significant implications.”

Homeowners insurance expense often gets lost in the purchase process

New homeowners often don’t see the expense coming because it’s hidden in the timing and mechanics of buying and insuring a home, Arsenault said.

“The sticker shock comes about 15 months after closing when the buyer’s mortgage payment increases by $400-plus because their insurance and their annual property tax have increased,” she said “They are being ‘double charged’ for the amount lacking in arrears — taxes are assessed in arrears ― and to make up for the new rate, they are collecting the additional amount for the current year.

“The first year of insurance is paid at closing, and the mortgage company collects a portion every month from the buyer to pay the same premium the following year. Most buyers don’t notice the letter from the insurance company after their first year of ownership, raising the annual premium.”

The five most expensive states for homeowners insurance

Here’s where homeowners insurance is most expensive, according to Insurance.com, based on $300,000 of coverage with a $1,000 deductible.

• Oklahoma: $5,858 per year.
• Kansas: $4,843 per year.
• Nebraska: $4,800 per year.
• Florida: $4,419 per year.
• Colorado: $4,099.

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Senior Business Writer Richard Mize has covered housing, construction, commercial real estate and related topics for the newspaper and Oklahoman.com since 1999. Contact him at rmize@oklahoman.com. Sign up for his weekly newsletter, Real Estate with Richard Mize. You can support Richard’s work, and that of his colleagues, by purchasing a digital subscription to The Oklahoman. Right now, you can get 6 months of subscriber-only access for $1.