In recent years, the cost of homeowner insurance in Georgia has risen sharply. Between 2019 and 2024, the rate rose by 30.9%, with an increase of 8.1% in 2024 alone. This growth was mainly due to the severe damage caused by hurricanes Idalia, Helene and Milton in 2023-2024, which led to heavy losses for insurance companies. Data shows that in 2024, the combined cost rate of homeowner insurance in Georgia reached 142%, meaning that for every $1.42 in premiums charged, insurance companies have to pay a loss of $1.
Currently, the average premium for homeowner insurance in Georgia is $1,954, which is lower than the national average but accounts for 2.6% of the median household income, exceeding the ideal ratio of 0.5%. Hurricane Helene killed 33 people and caused about 6 billion US dollars in losses across the state, intensifying the pressure on the insurance market.
The two major local Insurance companies in the state – the Georgia Department of Agriculture (GFB) and Southern Trust Insurance – had loss rates as high as 152.8% and 203.1% respectively in 2024, which was much higher than the industry average. National insurance companies diversify risks through geographical diversification, while small insurance companies rely on reinsurance. For instance, Southern Trust collaborates with 16 international reinsurance companies, but the complexity of the reinsurance market still poses challenges.
Furthermore, the Georgia Underwriting Association (GUA) was once exposed to a scandal where a former executive embezzled 2.5 million US dollars, revealing regulatory loopholes. To address the crisis, the state legislature has introduced a number of measures, including a review of insurance practices by a research committee, an expansion of the FORTIFIED windbreak program, and increased transparency in the reinsurance market.
It is suggested to draw on the experiences of Alabama and Florida, and ensure the stability and affordability of the insurance market by strengthening building standards, expanding the coverage of the guarantee fund, and enhancing the auditing function. The proactive actions of legislators may bring more sustainable solutions to homeowners and insurance companies.
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