Homeowners across the country are grappling with the rising costs of insurance, with many now considering relocating due to these escalating expenses, according to a recent report.
The report, published by mortgage fintech company Maxwell, highlights the significant financial strain homeowners are experiencing. The survey of 1,200 has found that if homeowners insurance rates continue to rise, approximately 57% of homeowners stated they may consider selling their homes or moving within the next five years.
The survey reveals that nearly half of homeowners are questioning whether they can continue to afford their housing payments, given the surge in the costs of insurance and property taxes.
“It’s clear; homeowners insurance and taxes are taking up an increasing share of a family’s monthly housing cost,” stated John Paasonen, co-founder and CEO of Maxwell, in a press release. “Our survey highlights that people are worried — they’re asking how they can afford to stay in their home, even if they have a low mortgage rate.”
A substantial 90% of homeowners reported an increase in their insurance costs within the last two years, with 6% experiencing a premium increase of at least 30%. Moreover, 57% said their premiums had risen between 10% and 30% over the same period. Reflecting these trends, 93% expressed concern that their insurance costs will continue to rise in the coming two years.
These fears are being realized as insurance providers are beginning to withdraw from areas at high risk for natural disasters. This trend, which initially impacted states like California and Florida, is leading to rising homeowners insurance rates across much of the United States.
In California, for instance, major insurers such as Allstate and State Farm ceased issuing new policies before the 2025 wildfires. Changes in California insurance regulations were designed to incentivize providers to return and alleviate pressure on the state’s insurance plans. However, despite regulations designed to keep insurance affordable, 95% of Californian homeowners had already seen an increase in their rates, with 15% experiencing a jump of over 30%.
“California homeowners, who benefited from regulations that capped homeowners premiums, now look set to see their costs escalate as insurers may be forced to reconsider their strategy in the state.”
Adding to these concerns, 23% of homeowners nationwide are worried about the possibility of losing their insurance coverage. These worries are more prevalent in California and Florida, where 57% and 48% of homeowners respectively are concerned about losing their plans. Approximately 5% of homeowners have opted to go without insurance due to high costs.
The increase in insurance costs is having a widespread impact, including on prospective homeowners. Since February 2023, closing costs have risen by an average of 1% each month, with insurance-related closing costs rising by 29% over the past two years.
Recent natural disasters have further compounded the situation. Corelogic estimates that insured losses from the largest fires in Southern California could range from $35 billion to $45 billion. The impact from Hurricanes Helene and Milton last summer caused damages to insurers between $10.5 billion and $17.5 billion, according to previous estimates.
