Homeowners Insurance Costs Kept Climbing – A Look at Last Year
It’s no secret—owning a home is getting pricier. And it’s not just the mortgages or maintenance eating away at budgets. Homeowners insurance is now taking a bigger bite out of household finances than ever before. The numbers are clear. On average, insurance rates jumped a whopping 11.4% in 2024 alone. Montana and Nebraska? They’re feeling it the hardest, with skyrocketing increases of 22.1% each. Ouch.
These rate hikes aren’t random. Insurance companies, faced with mounting claims from natural disasters and inflation-driven rebuilding costs, are hiking premiums to stay afloat. Rob Bhatt, a home insurance expert, put it bluntly. “Seven states paid out more in claims than they earned in premiums last year. They’re not in charity work—they’ve got to raise rates to survive.”
But here’s the real gut-punch for homeowners: it’s not like rates were low to begin with. The average homeowner shelled out $2,801 annually for insurance in 2024. Compare that to Oklahoma—a stinger at $6,133 per year—or Nebraska, clocking in at $5,912. For perspective, that’s more than double the national average. And if you’re in Hawaii? You lucked out at just $632. Imagine having that extra cash for groceries or gas.
Millions Still Go Without Insurance, Risking It All
Here’s another problem. Some homeowners are simply walking away from insurance altogether. About 13.6% of owner-occupied homes—yes, more than 11 million properties—don’t have any coverage at all. Can you believe that? It’s a gamble that could wreck someone’s financial future.
Imagine this. Your neighbor skips out on insurance to save $2,800 this year. A storm rolls through, and boom—a tree crashes into their living room. Repairs? $25,000 easy. Without insurance, they’re on the hook for the entire bill. It’s scary, but it’s becoming more common as people struggle to afford these premiums.
Why Are Costs Rising? It’s Not Just Disasters
Sure, we’ve seen the headlines. Hurricanes, wildfires, floods—oh my. But it’s not just massive natural disasters driving costs up. Inflation isn’t doing any favors either. Lumber, labor, even roof shingles cost more now than they did a few years back. And when rebuilding costs rise, insurance rates follow. It’s a vicious cycle. States like Utah, with rapid development in wildfire-prone areas, are sitting ducks for even higher rates.
States Taking Hits—and Some With Brighter Spots
Beyond Montana and Nebraska, states like Minnesota and Washington saw sharp spikes in their insurance rates too—an increase of 19.5%. Meanwhile, Florida? Surprisingly tame at just a 1.7% jump. Texas and New York weren’t too shabby either, at 3.4% and 3.8% respectively. That’s still an increase, but it’s far from a wallet-emptying spike.
For those who want to make sense of this madness, here’s the good news. There are ways to keep your premiums (somewhat) in check. Got small fixes at home—a leaky roof or a broken window? Pay out of pocket. Filing claim after claim can make your rates shoot up—or worse, get you dropped. And if you’re not already shopping around for better rates, what are you waiting for? Comparison tools are everywhere now.
A Grim Outlook
Halfway through 2025, the toll from national disasters has already been staggering. Hurricane Helene ravaged the Carolina coastlines in April, triggering massive flooding across inland areas and causing billions in damage. Tornado outbreaks in the Midwest have shattered records with nearly 200 confirmed tornadoes in May alone, and relentless wildfires in California have already resulted in damages exceeding $10 billion. To add to this, catastrophic flash floods across Texas in early June left hundreds of homes devastated. Compared to previous years, the scale and frequency of these disasters are shocking, marking 2025 as a particularly brutal year, and it’s only halfway through.
The repercussions are felt deeply by homeowners nationwide. Three-quarters of policyholders brace for more insurance premium increases this year, with 44% already finding it harder to afford coverage compared to previous years. With rates continuing to climb—driven by soaring rebuilding costs, climate-related risks, and insurance market instability—many are being forced to make an unnerving choice. A growing number are opting to leave their homes uninsured, gambling on luck as the cost of coverage surpasses their financial means.
Owning a home remains part of the American dream, yet for many, it has become an increasingly unaffordable reality. Rising premiums, amplified by a relentless string of natural disasters, are reshaping what it means to prepare for the unexpected. The question now is stark—how much longer can homeowners hold the line?