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Published: Feb 01, 2024 4 min read
Illustration of states with high home insurance costs
Money, Getty Images

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%.

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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.

  1. Florida: 68% ($1,127 to $1,896)
  2. New Mexico: 47% ($855 to $1,255)
  3. Colorado: 46% ($1,390 to $2,031)
  4. Idaho: 46% ($552 to $804)
  5. 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.

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