Homeowners insurance premiums grew an average of 24% — or $648 per U.S. homeowner — between 2021 and 2024, marking further proof that maintaining coverage has become unaffordable for typical Americans, one consumer advocacy group said this week.
The Consumer Federation of America released a study pinpointing the states that have seen their insurance policy costs jump the highest and where coverage is the most expensive. The priciest state to insure a home is hurricane-prone Florida, the CFA study found, followed by Louisiana and Tornado Alley staples Oklahoma and Nebraska. The cost of homeowners insurance has risen the sharpest in Utah, Illinois and Arizona — where the average premium has jumped 59%, 50% and 48%, respectively, according to the study.
Prices have spiked in Utah because some homes are being built in parts of the state at risk for wildfires, said Sharon Cornelissen, CFA's housing director. Sections of Illinois are now a hail or heavy wind danger, pushing prices skyward, she added.
But costs aren't going up everywhere.
Homeowners in two states — West Virginia and Mississippi — saw their premiums decrease by 24% and 15%, respectively, according to the study. The percentages may have dropped, but residents of those states are still cost-burdened by homeowners insurance, Cornelissen said.
"For example, Mississippi’s rates were already very high," she said in an email. They decreased from $4,301 on average in 2021 to $3,670 in 2024. "Even as typical Mississippi rates slightly went down, it remains one of the more expensive places in the country to get homeowners insurance," she added.
Insurance prices climbing at this rate is unsustainable, CFA researchers said in the study. The rising cost will keep first-time homebuyers out of the market and will force current homeowners to either sell their house or default on the mortgage, the CFA said.
CFA researchers analyzed insurance quote figures from Quadrant Information Services. The study reflects more than 425,000 quotes pulled between December 2021 and August 2024. They include prices from private companies and state-owned insurers of last resort.
All told, homeowners paid roughly $3,303 a year for coverage in 2024, up from $2,656 in 2021, the nonprofit group said. When adding in mobile home, condominium and renters insurance policies, Americans paid roughly $27 billion more in insurance premiums between 2021 and 2024, the CFA said.
Cost to rebuild plays a role in price increases
The rising cost of building materials and shrinking number of reinsurance providers have contributed to the cost increases, the CFA said. Extreme weather events caused by climate change are also pushing prices skyward, other researchers have suggested.
The CFA study marks the latest in a growing body of research that measures how expensive insurance has become for homeowners. Insurance rates grew 9.7 percent during the first nine months of 2024, according to the most recent data available from S&P Global Market Intelligence. Those costs grew an average of 11.3% nationwide in 2023, according to S&P.
Between 2018 and 2022, Americans living in areas prone to flooding, wildfires or hurricanes paid an average of $2,321 for their insurance premiums, while people in "safer" parts of the country shelled out $1,277, according to a U.S. Department of the Treasury analysis of insurance data. The report examined 246 million homeowner policies 330 insurance companies issued during a five-year period.
Homeowners should expect their insurance policies to become even more expensive by 2055, according to the First Street Foundation, a New York think tank that studies financial risk related to climate change. Premiums will increase by an average of 29.4%, First Street said, with homeowners in California, Florida and Texas feeling the worst of it.
