High Cost of Insurance Blamed for Slow Recovery on Mississippi Gulf CoastBy Rhonda Miller | Published 19 Aug 2011 08:47pm |
Six years after Hurricane Katrina wiped out thousands of homes on the Mississippi Gulf Coast, the high cost of insurance is often blamed for the slow pace of recovery. More insurance companies are writing policies in the state, but as MPB’s Rhonda Miller reports, that hasn’t slowed down the complaints.
The brick house on Pecan Lane in Long Beach has a carved wooden door and top quality appliances. Realtor Ray Gonzales says even though this is a solid house at a good price, it’s been on the market for a-year-and-a-half .
"The killer on the mortgage escrow is the insurance, that would be $346 a month just for the insurance," said Gonzales.
He said the cost of insurance has more than doubled since Katrina, and it’s now a discouraging percentage of the mortgage payment.
"Twenty-five percent, which is an ungodly amount to have to pay on a monthly note," Gonzales said.
State Insurance Commissioner Mike Chaney said homeowners need to shop around for insurance and people who insist on living too close to water can expect to pay for it.
"Availability is not a problem on the Gulf Coast, affordability is a problem. I’m often asked,' What are you doing about insurance rates?', "Chaney said. "What we’re doing is building a stronger fortified home. We’re staying out of the flood plains, staying out of wetlands and having proper land use. But a fortified home out of the flood plain will reduce your rates 50 percent in the state of Mississippi, especially in the lower three counties of the Gulf Coast."
Barb Corry thought she and her husband had settled down in a small Biloxi community, a few miles from the coast. Still, there was a moment when Corry decided to move.
"When the insurance jumped up," Corry said. "Our insurance went up to $2,800 and we were on a fixed income. And I said,' You know we have to go where we can afford it. We can’t afford it down here'."
Corry and her husband bought a house in Hattiesburg and say they’re happily resettled. One thing they like is their insurance is less expensive and they can easily pay their monthly bills.
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