Key Takeaways:
Homeowners insurance premiums rose 43% in the West from 2018 to 2024, outpacing inflation in every US region, a new industry report shows.
"It's a big problem," Peter Kochenburger, an insurance expert and visiting professor of law at Southern University Law Center, said of rising costs for consumers.
Average premiums climbed 18% in the Northeast, 25% in the Midwest and 27% in the Southeast over the seven-year period after accounting for inflation, according to the National Association of Insurance Commissioners, which released the analysis Wednesday. Premiums were highest in the Southeast at $1,818 a year in 2024 and lowest in the Northeast at $1,396. They have risen another 7% since the start of 2025, per a Bureau of Labor Statistics producer price index that proxies premium movement.
Insurers are also dropping customers at a faster clip. Nonrenewal rates per 1,000 in-force policies rose 96% in the Southeast and 216% in the West since 2018, NAIC found, with 103 million homeowners policies in force in the US as of 2024. The report's co-authors, Jeffrey Czajkowski and Paula Harms, wrote that the market is "under pressure and exhibiting signs of stress" even as it remains operationally strong.
Climate change and rising rebuilding costs are driving the increases. Severe weather events have grown more frequent and intense, raising the odds policyholders file claims and the size of those payouts, said Czajkowski, director of the NAIC Center for Insurance Policy and Research. Weather and climate disasters causing more than $1 billion in damage increased more than fivefold from 2018 through 2022 versus the 1980s, after inflation, per the Treasury Department. Replacement costs for property and casualty losses rose 45% on average between 2020 and 2023.
The burden falls hardest on low-income households, who are more likely to drop coverage and leave their largest asset exposed if disaster strikes, Kochenburger said. A Pew Research Center poll this year found 42% of homeowners said their costs had gone up "a lot." The National Association of Realtors estimates people's ability to afford a home is about 10% lower than it would be if insurance costs had held steady since the late 1990s.
If coverage becomes too pricey, fewer people may buy homes, creating a "cascading or domino effect" across the US economy, Kochenburger said. Homeowners should expect premiums to keep climbing as insurers pass on climate and rebuilding risk, and may need to review coverage limits or weigh state-backed plans where nonrenewals leave gaps. The figures reflect the NAIC report released Wednesday and should be verified against the latest official announcements.
This article is for informational purposes only and does not constitute professional or investment advice.
