Money Research Collective’s editorial team solely created this content. Opinions are their own, but compensation and in-depth research determine where and how companies may appear. Many featured companies advertise with us. How we make money.
The Soaring Cost of Homeowners Insurance Just Broke Another Record
By Adam Hardy MONEY RESEARCH COLLECTIVE
Why record-high premiums aren’t coming down anytime soon.
The cost of homeowners insurance is continuing its meteoric rise, according to a new report from financial data firm Intercontinental Exchange (ICE).
Annual home insurance premiums rose by a record $276 to $2,290 in 2024, a 14% increase from the previous year. ICE’s March report, released Monday, shows that home insurance costs have skyrocketed 61% since 2019.
While costs are up across the board, certain areas of the country are getting clobbered by the price hikes.
For instance, the Seattle, Salt Lake City and Los Angeles areas each saw insurance prices jump more than 20% last year. And in several Southern cities — Miami, New Orleans, Dallas and Tampa — annual premiums have risen above $3,500.
Why are home insurance prices so high?
Home insurance premiums have ballooned, especially lately, due to a mixture of more frequent natural disasters and increased material costs to repair damaged homes.
Just in the past several months, Florida and California have been devastated by hurricanes and wildfires, respectively, resulting in record-setting damages.
Last year, Hurricanes Milton and Helene in Florida are estimated to have left a $115 billion wake of destruction across the Sunshine State. Earlier this year, the wildfires around Los Angeles caused at least $50 billion in damages.
All the lumber and labor required to make repairs after such disasters are typically paid out by home insurance companies. And they have gotten much pricier, too. Since the start of the pandemic, construction materials have spiked in price by about 40%, far outpacing overall inflation.
Costly and catastrophic storms and wildfires then have rippling effects on home insurance prices across the nation. That’s because insurers often hike their prices in one place to recoup the costs of another in a practice known as “cross-subsidizing.”
Where homeowners insurance is most expensive
Metro area | Annual premium (2024) | 1-year increase | 5-year increase |
|---|---|---|---|
Miami | $6,225 | 6.4% | 65.6% |
New Orleans | $5,721 | 4.6% | 85.1% |
Houston | $3,675 | 16.3% | 64% |
Dallas | $3,659 | 19.9% | 81.5% |
Tampa, Florida | $3,602 | 5.8% | 76.7% |
Denver | $3,595 | 13.6% | 77.8% |
Oklahoma City | $3,411 | 11.4% | 44.4% |
Orlando, Florida | $3,208 | 5.5% | 85.5% |
Minneapolis | $3,044 | 18.9% | 71% |
Jacksonville, Florida | $2,805 | 4.8% | 91.2% |
How homeowners are coping with increased costs
ICE’s March report found two especially common ways homeowners are trying to escape expensive home insurance rates.
“We’re seeing increases in both the share of borrowers switching policies and borrowers taking on higher deductibles as a way to combat rising premiums,” Andy Walden, head of housing market research at ICE, said in a statement.
A record share of homeowners (11.4%) switched policies last year, according to ICE, up from 9.4% in 2023. In a typical year, Walden said, less than 8% switch.
Another risky method some homeowners are increasingly trying is to skip homeowners insurance altogether. About 6 million homeowners aren’t insured, according to the nonprofit Consumer Federation of America (CFA). In many cases, these are low-income homeowners who may have no choice.
“Many consumers are struggling to afford rising premiums and must go without homeowners insurance,” Sharon Cornelissen, director of housing at the CFA, said in a statement. “That puts them at risk of losing everything.”
Other far-less-risky strategies homeowners can take to lower insurance prices include making certain home upgrades to defend against natural disasters, bundling home and auto insurance policies, and fine-tuning coverage to the cost of rebuilding the home from the ground up (and not based on the home’s entire market value).
More from Money:
10 Home Upgrades That Can Lower Your Insurance Bill
What Happens If You Don’t Buy Homeowners Insurance?
Homeowners Are Increasing Insurance Deductibles to $5,000 or More to Save Money
Adam Hardy is Money's lead data journalist. He writes news and feature stories aimed at helping everyday people manage their finances. He joined Money full-time in 2021 but has covered personal finance and economic topics since 2018. Previously, he worked for Forbes Advisor, The Penny Hoarder and Creative Loafing. In addition to those outlets, Adam’s work has been featured in a variety of local, national and international publications, including the Asia Times, Business Insider, Las Vegas Review-Journal, Yahoo! Finance, Nasdaq and several others. Adam graduated with a bachelor’s degree from the University of South Florida, where he studied magazine journalism and sociology. As a first-generation college graduate from a low-income, single-parent household, Adam understands firsthand the financial barriers that plague low-income Americans. His reporting aims to illuminate these issues. Since joining Money, Adam has already written over 300 articles, including a cover story on financial surveillance, a profile of Director Rohit Chopra of the Consumer Financial Protection Bureau and an investigation into flexible spending accounts, which found that workers forfeit billions of dollars annually through the workplace plans. He has also led data analysis on some of Money’s marquee rankings, including Best Places to Live, Best Places to Travel and Best Hospitals. He regularly contributes data reporting for Best Colleges, Best Banks and other lists as well. Adam also holds a multimedia storytelling certificate from Poynter’s News University and a data journalism certificate from the Investigative Reporters and Editors (IRE) at the University of Missouri. In 2017, he received an English teaching certification from the University of Cambridge, which he utilized during his time in Seoul, South Korea. There, he taught students of all ages, from 5 to 65, and worked with North Korean refugees who were resettling in the area. Now, Adam lives in Saint Petersburg, Florida, with his pup Bambi. He is a card-carrying shuffleboard club member.