Home Insurance Costs Soar by 40% in 6 Years
Home costs have grown exponentially since 2019, but it isn’t just the selling price alone causing this increase. As natural disasters have become more frequent, home insurance premiums are also rising. According to an analysis from online lending platform LendingTree, Home insurance rates climbed 40.4% cumulatively across the U.S. over the past six years. Currently, the average annual cost of home insurance across the U.S. is $2,801.
From 2019 through 2021, rate growth was moderate, with 2021 seeing the most significant jump at 3%. More recently, however, rate growth has increased much faster. In 2024, for instance, insurance premiums grew by 11.4%, and in 2023, they grew by 11%.
Where rates have climbed the most
Over the past six years, home insurance rates rose the most in Colorado. Home insurance rates increased by 76.6% cumulatively in Colorado from 2019 through 2024. Nebraska and Utah followed closely behind, recording respective increases of 72.3% and 70.6% during the same period. Comparatively, the smallest six-year increase was in Vermont. There, home insurance premiums rose by 12.2%.
For 2024 alone, the states with the biggest increases were Montana and Nebraska. In both states, insurance costs rose by 22.1% over the course of the year.
States with the highest insurance premiums
While the nationwide insurance premium sits at $2,801, some states have much higher rates. Two states, in fact, have average insurance rates that are more than double the national average. Oklahoma's average insurance rate is the highest at $6,133, followed by Nebraska at $5,912. Comparatively, Hawaii has the lowest average rate at just $632.
Natural disasters are to blame for most of these cost increases
- Homeowners Insurance: The Other Affordability Crisis: From recent fires in Los Angeles to the damage caused by Hurricane Helene in 2024, natural disasters have caused insurance companies to increase prices or pull out of some markets altogether.
- Amid High Housing Costs, Home Insurance Rates Continue to Rise: Insurance rates have grown the most in coastal states where flooding is becoming more common, but even states not traditionally impacted by natural disasters are seeing rates pick up.