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The strange reasons homeowners in a rural Midwestern town pay more insurance than those in areas ravaged by wildfires, floods and hurricanes
A small rural town in Oklahoma has the unfortunate distinction of being the most expensive place to insure a home in the country.
Enid, 90 minutes north of Oklahoma City, has the most expensive home insurance relative to home values in the entirety of the US.
In many parts of the US, costs are rising as climate change brings increased risk of damage to properties from wildfires, floods and other natural disasters such as hurricanes.
Yet Enid, with a population of 50,000, is notably less at risk than places such as below-sea-level New Orleans or fire-ravaged Paradise in California.
Enid seems to have fallen victim to a series of factors, including officials who do not challenge companies raising premiums, home values relative to costs and geography, which have driven up its insurance prices.
Enid has the most expensive home insurance relative to home values in the entirety of the US
Home insurance is still cheaper in the Outer Banks of North Carolina, where houses have been slipping into the sea
The typical homeowner in Enid paid $2,113 on home insurance last year.
That is more than six times the national average relative to home value, the New York Times reported.
Home insurance relative to home value is cheaper in Florida Keys - despite that area frequently being hit by hurricanes - than Enid.
Likewise, it is also cheaper in the Outer Banks of North Carolina, where houses have been slipping into the sea.
Oklahoma is overall the sixth most expensive state in the country for home insurance, behind Florida, New York, Louisiana, Colorado and Hawaii.
If this is adjusted relative to home value, Oklahoma ranks third, after Louisiana and Mississippi.
The average premium across the US jumped 33 percent between 2020 and 2023, according to the latest data from CoreLogic. But they are higher in some states like Oklahoma.
This is illustrated by looking at how much homeowners on the edges of the state paid compared to those just over the border in neighboring states.
Last year, their premiums were as much much as 70 percent more than in Texas, Arkansas and Kansas - despite having the same level of risk exposure, according to federal data.
Furthermore, insurance companies are quoting homeowners in the middle and southeast of the US drastically more than others with similar risk levels, new research has found.
Indeed higher premiums are charged to homeowners in states where regulators apply less scrutiny to rate increase requests, compared with states whose officials routinely raise questions about how rates are justified, a new report by the National Bureau of Economic Research concluded.
Oklahoma's insurance commissioner has never denied a rate increase requested by an insurance company for home insurance, the Times reported.
The data reveals how some homeowners are being forced to shell out more than double for insurance, relative to value, than those with similar risk but in different parts of the country.
The CoreLogic data, analyzed by researchers Benjamin Keys, a professor at Wharton Business School and Philip Mulder, a professor at the University of Wisconsin, included the insurance paid by 12.4 million of the nation's roughly 80 million owner-occupied households.
The researchers argued that although there is a relationship between extreme weather risk and insurance costs there are also other factors at play that are creating a misalignment between risk and premiums.
The researchers found discrepancies such as how a typical homeowner in McCurtain County, Oklahoma pays an average of $2,837 for insurance.
Yet an average homeowner just across the state line in Little River County, Arkansas, pays $1,673.
Last year the average US household paid $500 in home insurance premiums for every $100,000 of home value, or 0.5 percent, according to Keys and Mulder.
Home insurance costs are rising as climate change brings increased risk of damage
Wildfires, floods and other natural disasters such as hurricanes are becoming more frequent
Areas that are frequently it by tornadoes will likely have higher insurance premiums
However, the typical homeowners in California paid premiums as low as .05 percent of home value.
This is despite the state suffering through more than 7,000 wildfires last year alone.
By contrast, homeowners in parts of Alabama, Oklahoma, Louisiana and Texas, paid more than 2 percent of the value of local homes.
'Families with the same level of risk exposure pay wildly different amounts to protect themselves from harm,' Dr. Keys told the New York Times.
'Different prices for the same risk feels unfair.'