If you live in a noncoastal area of the U.S., there's good news for you.

The average cost of insuring noncoastal residences in 2008 is expected to be up just 2% to 4% in many areas and flat or even falling in others, according to the Insurance Information Institute, or III.

This means it's a good time to shop around at large insurers such as State Farm and


(ALL) - Get Allstate Corporation Report


These minimal increases and flat or even declining rates are a result of the soft part of the market cycle that the entire property/casualty industry is currently experiencing.

If you live in a coastal, or hurricane-exposed area, the news is not so good.

According to the III, due to competitive pressures, insurance rates for all types of property/liability coverage -- car insurance, business insurance, etc. -- are expected to decline in 2008 except homeowners insurance in hurricane-exposed areas of the country.

Where are the hurricane-exposed areas of the country?

From the Gulf Coast of Texas around the southern tip of Florida all the way up the east coast to Maine. That's a tremendous amount of land and encompasses a tremendously populous area of the U.S. with tens of millions of people affected. These areas continue to experience double-digit rate increases.

With no major hurricanes hitting the U.S. in 2007, however, last year was a good year for homeowners insurers. Catastrophe losses during the first nine months of 2007 were $4.8 billion compared with $7.8 billion during the same period in 2006, according to the Insurance Services Organization's (ISO) Property Claims Service. These losses pale in comparison to the $62 billion in insured losses in 2005 due primarily to Hurricane Katrina.

TheStreet Recommends

But despite this good news, insurers never admit that they're out of the woods because you never know when the next catastrophe will hit. The most expensive catastrophe of 2007 came in the fourth quarter with the wildfires of Southern California, which have been estimated to cause insured losses of as much as $2 billion.

Then came the Midwestern tornadoes just this month with estimated insured losses expected to exceed $40 million.

As a rule now, insurers actively plan for a $100 billion event, or series of events adding up to $100 billion. And with about 46% of catastrophe losses coming from hurricanes and tropical storms according to the Insurance Services Organization, people living in hurricane-exposed areas will likely never see flat or declining premium rates.


In TheStreet.com Ratings quarterly review of the financial strength of 367 homeowners insurers, we found that the industry (defined as carriers that write at least $10 million in premiums or for whom homeowners makes up at least 10% of their business) earned $13.4 billion in the first nine months of 2007, down 1.9% from $13.7 billion in the same period in 2006. Ratings of two homeowners insurers were upgraded and two were downgraded based on third-quarter 2007 data.The ratings of the largest homeowners in the country are:

To find the rating of your homeowners insurer or one you're considering, go to our

Insurers and HMO Screener.

Melissa Gannon is director of insurance and bank ratings for TheStreet.com Ratings.

In keeping with TSC?s Investment Policy, employees of TheStreet.com Ratings with access to pre-publication ratings data must pre-clear any potential trade through the legal department, and are prohibited from trading any security that is the subject of an unpublished rating revision until the second business day after the rating is published.

While Gannon cannot provide investment advice or recommendations, she appreciates your feedback;

click here

to send her an email.