Dramatic Rise in Homeowners Insurance Rates Across the US
Homeowners insurance premiums have seen a significant surge, rising 24% from $2,656 in 2021 to $3,303 in 2024. This increase is more than twice the rate of inflation during the same period. According to a recent report by the Consumer Federation of America (CFA), the rise in insurance rates hasn’t been uniform across the country, with some states experiencing much sharper increases than others.
States Most Affected by Insurance Rate Hikes
The CFA report highlights that Utah has seen the most dramatic increase, with premiums soaring 59% from $1,126 in 2021 to $1,795 in 2024. Utah Insurance Commissioner Jon Pike attributes this sharp rise to more homes being built in wildfire-prone areas and an insurance market that was previously underpriced, finally adjusting for inflation. The top five states with the biggest increases are:
- Utah: +59%
- Illinois: +50%
- Arizona: +48%
- Pennsylvania: +44%
- Nebraska: +35%
“The skyrocketing price of insurance premiums is deepening the housing crisis … and homeowners across the country are feeling the strain,” said Sharon Cornelissen, CFA Director of Housing.
Factors Driving Up Premiums
Several key factors have contributed to the rise in homeowners insurance premiums:
- Climate Change: Increased frequency and severity of wildfires, flooding, and severe weather events have led to more claims.
- Inflation: Rising costs of labor, construction, and building materials have made homes more expensive to repair or rebuild.
- Reinsurance Costs: The reinsurance market has tightened, with providers passing increased costs onto consumers.
- Weak Regulatory Oversight: State insurance commissioners have given insurers more leeway to raise premiums.
Most and Least Expensive States for Homeowners Insurance
The report identifies Florida, Louisiana, Oklahoma, Kentucky, and Nebraska as the most expensive states for homeowners insurance. In Florida, the average annual premium is $9,462, representing a nearly 30% increase from 2021. Conversely, only three states saw premiums decline or remain stagnant: West Virginia (-24%), Mississippi (-15%), and Wyoming (no change).
Strategies to Lower Homeowners Insurance Rates
Despite the rising premiums, homeowners can take several steps to potentially lower their insurance costs:
- Bundle Home and Car Insurance: Many insurers offer discounts for bundling policies.
- Review and Adjust Coverage: Ensure you’re not over-insured by reviewing your policy and adjusting coverage as needed.
- Raise Your Deductible: Increasing your deductible can lower your premiums, but ensure you can afford the out-of-pocket costs.
- Improve Your Credit Score: Maintaining a good credit history can help lower your insurance premiums.
- Comparison Shop: Compare quotes from multiple insurers to find the best rates.
The CFA report urges both state and federal governments to take action to regulate insurers and protect consumers. As the insurance landscape continues to evolve, homeowners must stay informed and proactive in managing their insurance costs.
