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Home Insurance Prices Are Soaring — Especially in These 5 States
By Pete Grieve MONEY RESEARCH COLLECTIVE
In Florida, the average homeowners policy is up 68% over a two-year span.
Home insurance prices are soaring, and homeowners in states prone to natural disasters have been hit the hardest.
Nationally, average home insurance costs were up 21% at renewal from May 2022 to May 2023, according to a September report from Policygenius, an insurance marketplace. That jump is on top of a 12% home insurance premium increase the company reported for the year before, and experts are forecasting home insurance prices could see double-digit increases again in 2024.
No state has had it worse than Florida, where the average price of home insurance increased 68% in two years — nearly double the nationwide average of 35%.
Home insurance has always been expensive in Florida given the risk of hurricanes and flooding. But prices have risen sharply since 2021 due to recent storms, high costs for insurers related to roof litigation and mounting concern about climate change, according to the report. At least nine Florida property insurance companies have gone out of business since January 2021, and other home insurers have abandoned the state because it’s too costly to offer policies, making matters worse for homeowners seeking coverage.
States that are prone to wildfires and tornadoes also ranked near the top for the largest average premium increases in the past two years.
Where home insurance prices are rising fastest
Here are the top five states where home insurance got more expensive from May 2021 to May 2023.
- Florida: 68% ($1,127 to $1,896)
- New Mexico: 47% ($855 to $1,255)
- Colorado: 46% ($1,390 to $2,031)
- Idaho: 46% ($552 to $804)
- Texas: 46% ($1,471 to $2,141)
The Policygenius report cites “record-high insurance industry losses, more severe climate disasters, prolonged wildfire seasons, and higher construction prices” as some of the reasons for higher home insurance premiums.
The national average annual cost of home insurance climbed to about $1,700 in 2023, up from $1,175 in 2019, according to a December report from insurance firm Matic.
Some of the states where home insurance costs are soaring were affected by natural disasters like Florida (Hurricane Ian). Also, New Mexico and Colorado both had the most destructive wildfires in their histories.
Wildfire risk isn’t just making it more expensive to get insurance in affected states. It’s also making it harder for some people to find coverage at all as insurers are reportedly reducing exposure in certain areas.
“While most home insurance providers have raised premiums or reduced coverage in high-risk areas to remain profitable, others have gone out of business completely due to the turbulent market,” the Policygenius report said.
If you think you’re overpaying for home insurance, it’s smart to shop around — comparing quotes from multiple companies. You can consider opting for a higher deductible, which will lower your premium, among several other strategies for saving money on home insurance.
More from Money:
7 Best Homeowners Insurance Companies of September 2023
Home Insurers Are Leaving States and Hiking Prices — Here’s How to Cope
Home Insurance Costs for Beach Houses Could Soon Double in This State
Pete Grieve is a New York-based reporter who covers personal finance news. At Money, Pete covers trending stories that affect Americans’ wallets on topics including car buying, insurance, housing, credit cards, retirement and taxes. He studied political science and photography at the University of Chicago, where he was editor-in-chief of The Chicago Maroon. Pete began his career as a professional journalist in 2019. Prior to joining Money, he was a health reporter for Spectrum News in Ohio, where he wrote digital stories and appeared on TV to provide coverage to a statewide audience. He has also written for the San Francisco Chronicle, the Chicago Sun-Times and CNN Politics. Pete received extensive journalism training through Report for America, a nonprofit organization that places reporters in newsrooms to cover underreported issues and communities, and he attended the annual Investigative Reporters and Editors conference in 2021. Pete has discussed his reporting in interviews with outlets including the Columbia Journalism Review and WBEZ (Chicago's NPR station). He’s been a panelist at the Chicago Headline Club’s FOIA Fest and he received the Institute on Political Journalism’s $2,500 Award for Excellence in Collegiate Reporting in 2017. An essay he wrote for Grey City magazine was published in a 2020 book, Remembering J. Z. Smith: A Career and its Consequence.