Thinking of investing in real estate? Consider the impact of insurance rates and regional risks on your investment decisions. Understanding these factors can help you determine the potential losses and make informed choices. Here are some of the best and worst places to invest based on insurance rates and regional risks:
Worst Places to Invest
- Texas
- Properties in Texas face frequent wind/hail and named storm claims, leading to high insurance rates and deductibles.
- Nearly half of all claims in 2024 due to wind/hail damage were from Texas.
- Deductibles for wind/hail losses in Texas can start at $5,000 to $10,000.
- Florida
- Florida is also prone to named storms and wind/hail events, resulting in high insurance costs.
- Payouts for Hurricane Ian-related losses in 2022 were significant.
- Insurance deductibles for hurricane and wind damage are comparable to Texas.
- Detroit
- Detroit experiences high rates of vandalism, theft, and fire-related claims.
- The standard deductibles for theft and vandalism losses are $5,000.
- Some carriers only offer basic form policies in Detroit.
- Philadelphia
- Philadelphia sees a high frequency of liability claims.
- Unpredictable legal environment and frivolous lawsuits make it a high risk for investors.
- Nearly 30% of all liability claims reported originate from Pennsylvania.
Challenges for Texas and Florida investors include higher repair costs and risks following destructive weather events. For Detroit and Philadelphia, unique challenges like theft, vandalism, and liability claims can impact investments.
Best Places to Invest
- North Carolina
- South Carolina
- Arizona
- Utah
- Kentucky
- Tennessee
These states offer more stable conditions with competitive insurance rates and lower claims frequency, making them attractive for real estate investors. Long-term tenants, affordable insurance premiums, and positive relationships with local real estate groups make these states stand out.
Protecting Your Investments
Whether you invest in high-risk or low-risk areas, National Real Estate Insurance Group provides tailored solutions and mitigation resources to help you protect your investments. With our expertise and understanding of regional risks, we help you secure the best coverage and rates available.
Consider the impact of insurance rates and regional risks on your investment decisions, and choose wisely to safeguard your investments.
