1 in 5 Properties in Mississippi, Louisiana and New Mexico Don’t Have Disaster Insurance
No one can predict when disaster will strike. But having the right type and amount of homeowners insurance could provide financial protection for your property and belongings if you become a victim of an unforeseen catastrophe. Of course, that protection is only effective if it’s in place before you need it.
The newest LendingTree study examines properties with fire, hazard or flood insurance — a combined look from the U.S. Census Bureau that we’re referencing as disaster insurance.
Read on to discover important details, including the percentage of properties without insurance, where premiums are highest, where property owners put the highest percentage of their household income toward these insurance types and more.
Key findings
- At least 20% of owner-occupied properties in Mississippi, Louisiana and New Mexico don’t have fire, hazard or flood insurance. Two of the states most at risk for flooding — Mississippi and Louisiana — have the highest share of properties without disaster insurance, at 22.2% and 20.5%, respectively. New Mexico — a state at increased risk for wildfires — joins them, also at 20.5%. The states with the smallest share of properties without disaster insurance are Oregon (8.1%), Utah (8.3%) and the District of Columbia (8.8%).
- Florida property owners owe the highest annual disaster insurance premiums. Annual disaster insurance premiums on owner-occupied properties average $2,324 in Florida — another state at high risk for flooding — far ahead of Louisiana ($1,956) and Colorado ($1,920). West Virginia ($915) is the only state with average disaster insurance premiums below $1,000, beneath Wisconsin ($1,029) and Maine ($1,043).
- The states where property owners spend the highest percentage of their household income on disaster insurance are Florida, Louisiana and Oklahoma. Florida (1.96%) and Louisiana (1.93%) join tornado alley state Oklahoma (1.83%) at the top. The states where property owners spend the smallest share of their household income on this are the District of Columbia (0.67%), Utah (0.82%) and New Hampshire (0.84%).
- Property owners with disaster insurance have significantly higher property values in every state than those without it. The biggest difference is 102.0% in Louisiana, where property values average $278,613 for those with insurance and $137,955 for those without. At the bottom of the list is New Hampshire, at a still significant 12.9% difference — $448,861 (with) and $397,503 (without).
How we’re defining disaster insurance
Our analysis examines U.S. Census Bureau 2022 American Community Survey (with one-year estimates) data. Specifically, the survey asks respondents about “fire, hazard and flood insurance.”
We’re defining this as “disaster insurance” in this study as an overarching term for insurance protections against disasters rather than a specific type of product.
The survey data doesn’t differentiate among the three types of insurance, so we can’t specify — for example — whether a property has hazard insurance but not flood and fire insurance.
1 in 5 properties in Mississippi, Louisiana and New Mexico don’t have fire, hazard or flood insurance
Below are the three types of insurance examined in our study. As a reminder, these types of insurance collectively make up the definition of “disaster insurance” in our study.
- Fire insurance: This provides financial coverage if your house or belongings are damaged or destroyed during a fire (including wildfires). In general, this type of coverage is included in a standard homeowners policy.
- Hazard insurance: Hazard insurance is the part of your homeowners insurance policy that covers the structure of your home if you experience damage or loss from perils such as theft, fire, smoke, hailstorms, windstorms, explosions, lightning and more.
- Flood insurance: This type of coverage can protect you if your home or belongings are damaged due to flooding. Renters can also purchase flood insurance (typically separate from traditional renters insurance). If you have a mortgage on your home and live in a flood-prone area, your lender may require you to purchase separate flood insurance on top of standard homeowners coverage.
Depending on where you live and the type of property you own, you may want to consider purchasing all three types of insurance. Yet despite the importance of having adequate coverage to protect your home and belongings, many homeowners and renters lack disaster insurance.
Three states at high risk for various natural disasters have the highest percentage of homeowners without disaster insurance coverage. Mississippi and Louisiana (at high risk for flooding) have a troubling number of owner-occupied properties without disaster insurance. In Mississippi, 22.2% of homeowners lack this coverage, along with 20.5% of homeowners in Louisiana. Meanwhile, 20.5% of New Mexico homeowners have no disaster insurance, even though the state experiences a higher-than-typical risk of wildfires.
There are many reasons why people may choose to go uninsured or underinsured, but cost is a common factor.
The median household income in Mississippi, the state with the highest percentage of properties lacking disaster insurance, was $52,719 in 2022 — the lowest in the U.S. Mississippi, Louisiana and New Mexico are also among the 10 states with the highest poverty rates in the nation.
On the opposite end of the spectrum, the states with the lowest percentage of uninsured properties — aka those lacking disaster insurance — are:
- Oregon: 8.1%
- Utah: 8.3%
- District of Columbia: 8.8%
In the District of Columbia, where the vast majority of homeowners (91.2%) have disaster insurance, the median household income in 2022 was nearly double that of Mississippi, at $101,027. This is a stark contrast to the states with lower median incomes where the percentage of uninsured homeowners is significantly higher.
Below is a deeper look at each state and the percentage of owner-occupied properties with and without disaster insurance:
Percentage of owner-occupied properties without disaster insurance by state
| Rank | State | % of properties with disaster insurance | % of properties without disaster insurance |
|---|---|---|---|
| N/A | U.S. | 87.4% | 12.6% |
| 1 | Mississippi | 77.8% | 22.2% |
| 2 | Louisiana | 79.5% | 20.5% |
| 2 | New Mexico | 79.5% | 20.5% |
| 4 | West Virginia | 80.7% | 19.3% |
| 5 | Alaska | 81.7% | 18.3% |
| 6 | Alabama | 82.5% | 17.5% |
| 7 | Oklahoma | 82.8% | 17.2% |
| 8 | Florida | 82.9% | 17.1% |
| 9 | North Dakota | 83.0% | 17.0% |
| 10 | Texas | 83.4% | 16.6% |
| 11 | Arkansas | 83.8% | 16.2% |
| 12 | Kentucky | 83.9% | 16.1% |
| 13 | Wyoming | 84.5% | 15.5% |
| 13 | South Carolina | 84.5% | 15.5% |
| 15 | South Dakota | 84.9% | 15.1% |
| 16 | Kansas | 85.1% | 14.9% |
| 16 | Montana | 85.1% | 14.9% |
| 18 | Michigan | 86.5% | 13.5% |
| 19 | Tennessee | 87.0% | 13.0% |
| 19 | Indiana | 87.0% | 13.0% |
| 21 | Arizona | 87.2% | 12.8% |
| 22 | Missouri | 87.5% | 12.5% |
| 23 | Nebraska | 87.7% | 12.3% |
| 24 | Georgia | 88.0% | 12.0% |
| 24 | Iowa | 88.0% | 12.0% |
| 26 | Maine | 88.2% | 11.8% |
| 27 | North Carolina | 88.3% | 11.7% |
| 28 | Wisconsin | 88.6% | 11.4% |
| 29 | Hawaii | 88.9% | 11.1% |
| 29 | Ohio | 88.9% | 11.1% |
| 29 | Nevada | 88.9% | 11.1% |
| 32 | New York | 89.0% | 11.0% |
| 33 | Minnesota | 89.4% | 10.6% |
| 34 | Delaware | 89.5% | 10.5% |
| 34 | Pennsylvania | 89.5% | 10.5% |
| 36 | Connecticut | 89.6% | 10.4% |
| 36 | Vermont | 89.6% | 10.4% |
| 38 | Illinois | 89.7% | 10.3% |
| 39 | Idaho | 89.9% | 10.1% |
| 40 | Rhode Island | 90.0% | 10.0% |
| 40 | New Jersey | 90.0% | 10.0% |
| 40 | Virginia | 90.0% | 10.0% |
| 43 | Washington | 90.3% | 9.7% |
| 44 | Colorado | 90.5% | 9.5% |
| 45 | Massachusetts | 90.6% | 9.4% |
| 45 | California | 90.6% | 9.4% |
| 47 | Maryland | 91.0% | 9.0% |
| 48 | New Hampshire | 91.1% | 8.9% |
| 49 | District of Columbia | 91.2% | 8.8% |
| 50 | Utah | 91.7% | 8.3% |
| 51 | Oregon | 91.9% | 8.1% |
Source: LendingTree analysis of U.S. Census Bureau 2022 American Community Survey (with one-year estimates) data.
Florida property owners owe highest annual disaster insurance premiums
It’s no secret that homeowners insurance rates have been rising across the country. But in some areas, insurance premiums are far more costly than in others. Florida property owners, for example, pay the highest annual disaster insurance rates ($2,324). The state with the second highest premiums is Louisiana ($1,956), followed closely by Colorado ($1,920).
Florida and Louisiana are two of the states with the highest risk of flooding in the country, thanks in large part to the powerful storms that have historically frequented these coastal areas. Therefore, it makes sense that insurers would charge higher premiums to offset the risks they face when insuring homeowners in these states.
Also, Colorado has experienced many wildfires in the recent past. These natural disasters have driven up insurance premiums and made it difficult for some homeowners to maintain disaster coverage.
By comparison, the states where property owners pay the lowest annual disaster premiums are:
- West Virginia: $915
- Wisconsin: $1,029
- Maine: $1,043
Average annual disaster insurance premiums by state
| Rank | State | Average annual disaster insurance premiums |
|---|---|---|
| N/A | U.S. | $1,399 |
| 1 | Florida | $2,324 |
| 2 | Louisiana | $1,956 |
| 3 | Colorado | $1,920 |
| 4 | Texas | $1,901 |
| 5 | Oklahoma | $1,874 |
| 6 | Kansas | $1,733 |
| 7 | Connecticut | $1,727 |
| 8 | Nebraska | $1,682 |
| 8 | Rhode Island | $1,682 |
| 10 | Massachusetts | $1,677 |
| 11 | Minnesota | $1,628 |
| 12 | Hawaii | $1,586 |
| 13 | California | $1,585 |
| 14 | Mississippi | $1,558 |
| 15 | Montana | $1,548 |
| 16 | South Dakota | $1,507 |
| 17 | North Dakota | $1,503 |
| 18 | Wyoming | $1,502 |
| 19 | New York | $1,500 |
| 20 | Missouri | $1,496 |
| 21 | Georgia | $1,461 |
| 22 | District of Columbia | $1,419 |
| 23 | New Jersey | $1,412 |
| 23 | Alabama | $1,412 |
| 25 | South Carolina | $1,401 |
| 26 | Maryland | $1,361 |
| 27 | Alaska | $1,341 |
| 28 | Tennessee | $1,327 |
| 29 | Washington | $1,318 |
| 30 | Arkansas | $1,309 |
| 31 | Virginia | $1,284 |
| 32 | Iowa | $1,268 |
| 33 | New Mexico | $1,265 |
| 34 | Kentucky | $1,264 |
| 35 | Illinois | $1,261 |
| 36 | North Carolina | $1,258 |
| 37 | Indiana | $1,194 |
| 38 | New Hampshire | $1,132 |
| 39 | Oregon | $1,106 |
| 39 | Vermont | $1,106 |
| 41 | Idaho | $1,089 |
| 42 | Michigan | $1,083 |
| 43 | Ohio | $1,076 |
| 44 | Arizona | $1,075 |
| 45 | Delaware | $1,072 |
| 46 | Pennsylvania | $1,069 |
| 47 | Nevada | $1,065 |
| 48 | Utah | $1,064 |
| 49 | Maine | $1,043 |
| 50 | Wisconsin | $1,029 |
| 51 | West Virginia | $915 |
Source: LendingTree analysis of U.S. Census Bureau 2022 American Community Survey (with one-year estimates) data.
Of course, whether you live in a high-cost or low-cost state when it comes to disaster insurance premiums, numerous factors could affect your insurance rates. The size and age of your home, the estimated replacement cost of your property, the deductible you choose and your credit score might affect your insurance rates.
Total disaster insurance premiums paid by state
| Rank | State | Total disaster insurance premiums paid |
|---|---|---|
| N/A | U.S. | $108,982,154,234 |
| 1 | Florida | $11,427,661,112 |
| 2 | Texas | $10,994,806,096 |
| 3 | California | $10,865,674,275 |
| 4 | New York | $5,608,350,000 |
| 5 | Illinois | $3,838,936,699 |
| 6 | Pennsylvania | $3,500,148,663 |
| 7 | Georgia | $3,462,214,977 |
| 8 | North Carolina | $3,193,209,076 |
| 9 | Ohio | $3,147,131,068 |
| 10 | New Jersey | $2,893,231,772 |
| 11 | Michigan | $2,805,487,674 |
| 12 | Colorado | $2,758,807,680 |
| 13 | Massachusetts | $2,647,796,853 |
| 14 | Virginia | $2,638,898,628 |
| 15 | Minnesota | $2,441,391,128 |
| 16 | Washington | $2,354,911,458 |
| 17 | Missouri | $2,233,650,672 |
| 18 | Tennessee | $2,215,671,995 |
| 19 | Indiana | $2,007,586,824 |
| 20 | Maryland | $1,996,346,103 |
| 21 | Louisiana | $1,915,190,016 |
| 22 | South Carolina | $1,821,011,394 |
| 23 | Arizona | $1,804,803,525 |
| 24 | Alabama | $1,649,327,548 |
| 25 | Oklahoma | $1,601,406,086 |
| 26 | Wisconsin | $1,552,096,266 |
| 27 | Connecticut | $1,471,642,326 |
| 28 | Kentucky | $1,342,950,704 |
| 29 | Kansas | $1,176,131,644 |
| 30 | Oregon | $1,102,664,304 |
| 31 | Iowa | $1,073,311,280 |
| 32 | Mississippi | $974,343,598 |
| 33 | Arkansas | $886,331,754 |
| 34 | Utah | $784,561,680 |
| 35 | Nebraska | $778,071,334 |
| 36 | Nevada | $686,004,840 |
| 37 | New Mexico | $607,840,090 |
| 38 | Idaho | $508,518,351 |
| 39 | Hawaii | $437,618,636 |
| 40 | Rhode Island | $427,110,260 |
| 41 | Montana | $423,901,224 |
| 42 | New Hampshire | $417,983,076 |
| 43 | Maine | $413,872,830 |
| 44 | West Virginia | $405,657,930 |
| 45 | South Dakota | $331,535,479 |
| 46 | Delaware | $286,822,176 |
| 47 | North Dakota | $267,999,930 |
| 48 | Wyoming | $225,900,800 |
| 49 | Vermont | $201,058,634 |
| 50 | Alaska | $200,089,269 |
| 51 | District of Columbia | $174,484,497 |
Source: LendingTree analysis of U.S. Census Bureau 2022 American Community Survey (with one-year estimates) data.
Where property owners put largest/smallest percentage of household income toward disaster insurance
Any property owner with disaster insurance dedicates some portion of their household income toward paying for this expense. Yet in certain states, residents who carry disaster insurance spend a larger portion of their income on these costs.
The states where homeowners apply the biggest percentage of their household income toward disaster insurance are:
- Florida: 1.96%
- Louisiana: 1.93%
- Oklahoma: 1.83%
It’s no surprise that the three states also rank among the top five with the highest disaster insurance premiums in the U.S. At the same time, Louisiana and Oklahoma are among the 10 states with the highest poverty rates in the nation.
Residents of states with a combination of lower disaster insurance premiums and higher household incomes, by comparison, may have different experiences. The cost of disaster insurance coverage in these states is less demanding, including in the three states where property owners spend the smallest percentage of their household incomes — the District of Columbia (0.67%), Utah (0.82%) and New Hampshire (0.84%).
The District of Columbia has the highest average household income among those with disaster insurance, at $211,504. The average household incomes among those with disaster insurance in Utah ($130,150) and New Hampshire ($134,045) are also above the U.S. average of $121,186.
Percentage of household income spent on disaster insurance
| Rank | State | Average annual disaster insurance premiums | Average household income among those with disaster insurance | % of income toward premiums |
|---|---|---|---|---|
| N/A | U.S. | $1,399 | $121,186 | 1.15% |
| 1 | Florida | $2,324 | $118,566 | 1.96% |
| 2 | Louisiana | $1,956 | $101,093 | 1.93% |
| 3 | Oklahoma | $1,874 | $102,385 | 1.83% |
| 4 | Mississippi | $1,558 | $89,463 | 1.74% |
| 5 | Kansas | $1,733 | $112,406 | 1.54% |
| 6 | Montana | $1,548 | $103,978 | 1.49% |
| 7 | Texas | $1,901 | $128,399 | 1.48% |
| 8 | Wyoming | $1,502 | $101,968 | 1.47% |
| 8 | Nebraska | $1,682 | $114,252 | 1.47% |
| 10 | Missouri | $1,496 | $105,888 | 1.41% |
| 10 | Alabama | $1,412 | $99,978 | 1.41% |
| 12 | South Dakota | $1,507 | $108,329 | 1.39% |
| 12 | Colorado | $1,920 | $138,255 | 1.39% |
| 14 | Arkansas | $1,309 | $95,329 | 1.37% |
| 15 | South Carolina | $1,401 | $104,808 | 1.34% |
| 16 | Rhode Island | $1,682 | $128,464 | 1.31% |
| 17 | Minnesota | $1,628 | $126,721 | 1.28% |
| 18 | Tennessee | $1,327 | $104,737 | 1.27% |
| 19 | New Mexico | $1,265 | $100,554 | 1.26% |
| 20 | Kentucky | $1,264 | $100,718 | 1.25% |
| 20 | North Dakota | $1,503 | $120,467 | 1.25% |
| 22 | Georgia | $1,461 | $119,396 | 1.22% |
| 23 | Iowa | $1,268 | $106,217 | 1.19% |
| 24 | Indiana | $1,194 | $103,557 | 1.15% |
| 25 | North Carolina | $1,258 | $111,797 | 1.13% |
| 26 | Hawaii | $1,586 | $142,196 | 1.12% |
| 27 | Connecticut | $1,727 | $156,695 | 1.10% |
| 28 | Massachusetts | $1,677 | $162,129 | 1.03% |
| 28 | Alaska | $1,341 | $130,376 | 1.03% |
| 30 | West Virginia | $915 | $90,150 | 1.01% |
| 30 | Michigan | $1,083 | $106,731 | 1.01% |
| 30 | New York | $1,500 | $147,964 | 1.01% |
| 30 | Idaho | $1,089 | $107,848 | 1.01% |
| 34 | Maine | $1,043 | $104,510 | 1.00% |
| 34 | Illinois | $1,261 | $126,554 | 1.00% |
| 36 | Ohio | $1,076 | $108,697 | 0.99% |
| 36 | Vermont | $1,106 | $111,764 | 0.99% |
| 38 | California | $1,585 | $161,324 | 0.98% |
| 39 | Wisconsin | $1,029 | $109,799 | 0.94% |
| 40 | Maryland | $1,361 | $146,995 | 0.93% |
| 41 | Arizona | $1,075 | $117,079 | 0.92% |
| 41 | Virginia | $1,284 | $139,861 | 0.92% |
| 43 | Pennsylvania | $1,069 | $117,032 | 0.91% |
| 43 | Delaware | $1,072 | $117,495 | 0.91% |
| 45 | Nevada | $1,065 | $119,203 | 0.89% |
| 45 | Washington | $1,318 | $147,878 | 0.89% |
| 45 | Oregon | $1,106 | $124,297 | 0.89% |
| 48 | New Jersey | $1,412 | $160,462 | 0.88% |
| 49 | New Hampshire | $1,132 | $134,045 | 0.84% |
| 50 | Utah | $1,064 | $130,150 | 0.82% |
| 51 | District of Columbia | $1,419 | $211,504 | 0.67% |
Source: LendingTree analysis of U.S. Census Bureau 2022 American Community Survey (with one-year estimates) data.
Property owners with disaster insurance have significantly higher property values in every state than those without it
There’s a meaningful difference in the average property values among homeowners with disaster insurance and those without. This trend holds true in every state, but more so in some than others.
Property value differences for those who do and don’t carry disaster insurance are heavily pronounced in Texas and Mississippi. Average property values with disaster insurance in these states are $382,820 (Texas) and $228,162 (Mississippi), compared with $195,932 and $117,315 without coverage — differences of 95.4% and 94.5%, respectively.
The bottom three states where property values increase when disaster insurance is present are:
- New Hampshire: $448,861 (with) and $397,503 (without disaster insurance) — a 12.9% difference
- Rhode Island: $455,873 (with) and $401,496 (without disaster insurance) — a 13.5% difference
- New York: $564,466 (with) and $479,327 (without disaster insurance) — a 17.8% difference
Here’s a fuller look:
Percentage change in property values among those with and without distance insurance by state
| Rank | State | Average property values among those with disaster insurance | Average property values among those without disaster insurance | % difference between those with and without disaster insurance |
|---|---|---|---|---|
| N/A | U.S. | $419,716 | $293,865 | 42.8% |
| 1 | Louisiana | $278,613 | $137,955 | 102.0% |
| 2 | Texas | $382,820 | $195,932 | 95.4% |
| 3 | Mississippi | $228,162 | $117,315 | 94.5% |
| 4 | Alabama | $273,387 | $141,914 | 92.6% |
| 5 | New Mexico | $314,437 | $168,112 | 87.0% |
| 6 | Kansas | $272,788 | $146,371 | 86.4% |
| 7 | South Carolina | $352,342 | $189,656 | 85.8% |
| 8 | Arkansas | $244,853 | $134,699 | 81.8% |
| 9 | Oklahoma | $265,784 | $150,855 | 76.2% |
| 10 | Kentucky | $254,316 | $153,372 | 65.8% |
| 11 | Wyoming | $409,603 | $247,742 | 65.3% |
| 12 | Alaska | $380,654 | $230,650 | 65.0% |
| 13 | West Virginia | $200,475 | $124,116 | 61.5% |
| 14 | South Dakota | $322,942 | $200,500 | 61.1% |
| 15 | Montana | $514,554 | $324,008 | 58.8% |
| 16 | Michigan | $279,355 | $176,321 | 58.4% |
| 17 | Maine | $362,451 | $229,577 | 57.9% |
| 18 | Florida | $478,870 | $303,397 | 57.8% |
| 19 | North Carolina | $360,005 | $230,633 | 56.1% |
| 20 | Missouri | $277,280 | $177,822 | 55.9% |
| 21 | Virginia | $470,440 | $305,858 | 53.8% |
| 22 | Georgia | $367,417 | $241,732 | 52.0% |
| 23 | Oregon | $536,506 | $354,987 | 51.1% |
| 24 | Colorado | $647,274 | $429,197 | 50.8% |
| 25 | Tennessee | $369,728 | $248,510 | 48.8% |
| 26 | Washington | $702,379 | $475,023 | 47.9% |
| 27 | Arizona | $492,148 | $336,887 | 46.1% |
| 28 | Ohio | $255,140 | $175,755 | 45.2% |
| 29 | Nevada | $516,625 | $358,860 | 44.0% |
| 30 | Idaho | $515,556 | $358,779 | 43.7% |
| 31 | Iowa | $246,714 | $174,544 | 41.3% |
| 32 | California | $956,364 | $686,215 | 39.4% |
| 33 | Illinois | $314,150 | $231,650 | 35.6% |
| 34 | Vermont | $356,350 | $263,419 | 35.3% |
| 35 | Pennsylvania | $304,067 | $224,934 | 35.2% |
| 36 | District of Columbia | $903,821 | $671,952 | 34.5% |
| 37 | Nebraska | $275,727 | $205,154 | 34.4% |
| 38 | Hawaii | $962,592 | $735,843 | 30.8% |
| 39 | Indiana | $255,783 | $196,007 | 30.5% |
| 40 | Wisconsin | $307,957 | $236,898 | 30.0% |
| 41 | Minnesota | $369,213 | $284,373 | 29.8% |
| 42 | Delaware | $380,503 | $298,611 | 27.4% |
| 43 | North Dakota | $286,437 | $225,490 | 27.0% |
| 43 | Connecticut | $479,924 | $377,914 | 27.0% |
| 45 | Utah | $588,127 | $468,889 | 25.4% |
| 46 | Massachusetts | $642,097 | $535,784 | 19.8% |
| 47 | Maryland | $472,549 | $396,471 | 19.2% |
| 48 | New Jersey | $507,047 | $428,100 | 18.4% |
| 49 | New York | $564,466 | $479,327 | 17.8% |
| 50 | Rhode Island | $455,873 | $401,496 | 13.5% |
| 51 | New Hampshire | $448,861 | $397,503 | 12.9% |
Source: LendingTree analysis of U.S. Census Bureau 2022 American Community Survey (with one-year estimates) data.
Insurance for disasters: 3 things to know
As a homeowner, insuring your property against unforeseen disasters could provide essential financial protection. Yet there’s important information you should understand when it comes to disaster insurance.
Homeowners insurance may not cover all disaster-related damage
Standard homeowners insurance typically should protect you from the most common losses you might face as a property owner. Generally, this includes fire (including wildfires), lightning, falling objects, burst pipes and theft. Yet you might need to purchase separate insurance for certain types of natural disasters, especially if you live in certain parts of the country.
“Windstorm insurance is sold separately in areas susceptible to hurricanes and tropical storms,” says Bhatt, “including coastal areas in Florida and Texas. In these areas, you have to purchase a separate windstorm policy to cover wind and hail, in addition to regular home insurance for the other risks.”
Bhatt also says you may need extra coverage if you want protection from floods, earthquakes, landslides and other forms of earth movement. Standard homeowners insurance usually doesn’t cover you in these events.
Your mortgage company might require you to buy additional insurance
When you finance a home, your lender typically requires you to carry homeowners insurance to protect its investment. If you make less than a 20% down payment on a conventional loan, you might have to carry mortgage insurance. However, there are also situations where additional disaster coverage may be necessary.
“If you apply for a mortgage in a high-risk flood zone in FEMA’s maps,” says Bhatt, “your lender will require you to purchase flood insurance, in addition to standard homeowners insurance. The requirement extends to a loan issued by any federally regulated financial institution, which includes most lenders, including banks, credit unions and nonbanks.”
As a renter, you may need separate disaster insurance
When you rent a home or apartment, you’re not typically responsible for any structural damage to a property. But the insurance your landlord carries won’t cover your personal belongings. A standard renters policy might not be sufficient to cover you for certain types of natural disasters either.
“Renters insurance usually doesn’t cover damage your items sustain in a flood, earthquake or other excluded cause,” Bhatt says. “But contents coverage, which covers your possessions, is widely available for flood insurance, and some companies also offer contents-only earthquake insurance for renters.”
Methodology
LendingTree researchers analyzed the U.S. Census Bureau 2022 American Community Survey (with one-year estimates) to determine the percentage of owner-occupied properties with and without fire, hazard or flood insurance.
Our study refers to this as disaster insurance based on the Census Bureau description that these are “policies that protect the property and its contents against loss due to damage by fire, lightning, winds, hail, flood, explosion, and so on.” We’re using this as an overarching term for insurance protections for disasters rather than a specific type of product. The Census Bureau has asked the same questions related to disaster insurance since 1996.
We divided the number of owner-occupied properties with disaster insurance by the total number of owner-occupied properties to determine the share of homes with this insurance. We multiplied average annual disaster insurance premiums by the number of owner-occupied properties with disaster insurance to determine total disaster insurance premiums paid.
We used average household incomes among those with and without disaster insurance to determine the percentage of household income that goes toward this insurance and calculate the percentage change between both.
Finally, we used average property values among those with and without disaster insurance to calculate the percentage change between both.