A new national analysis of home insurance premiums is putting Nebraska in an uncomfortable spotlight, with much of the state landing in the highest cost category, a trend experts say is tied closely to growing severe weather risks.
Nebraska Extension’s Eric Hunt said recent data highlighted in a Wall Street Journal report shows average homeowners insurance premiums across most Nebraska counties exceeding $4,000 per year.
“With a couple of exceptions, the homeowner’s insurance premium averages across the state are in the highest category,” Hunt said. “Over $4,000 per year.”
While that figure is far below the steep premiums seen in hurricane-prone states like Florida, topping over $26,000, Hunt said Nebraska’s costs are largely justified by its exposure to damaging weather, especially hail.
“We do have a very high risk of hail across most of the state,” he said.
That risk has grown in recent decades, driven in part by atmospheric changes that can fuel stronger storms.
“Warmer temperatures can hold more water vapor, which means we can have more potential energy … stronger updrafts to maintain big hailstones,” Hunt said.
Large hail has been a persistent and costly issue across Nebraska, particularly in the eastern half of the state where population density, and insured property, is higher. The damage to roofs, siding and other structures has contributed to rising insurance claims and higher premiums for homeowners.
Despite the increases, Hunt said Nebraska’s insurance rates are generally aligned with the actual level of risk, unlike some states where premiums lag behind potential losses.
That balance comes with tradeoffs, he said. States that more aggressively regulate insurance rates may keep premiums lower in the short term but risk driving insurers out of the market altogether. Nebraska’s approach allows for more competition among providers but can result in higher costs for consumers.
Hunt said the broader trend is clear across the central United States, where insurance rates have climbed sharply over the past decade as severe weather events become more frequent and costly.
“The highest rate increases in the country have occurred in Nebraska and a lot of our surrounding states in the last 10 years,” he said.