Home Insurance Premiums Surge 40% Nationally, with Key States Experiencing the Sharpest Increases

Homeowners insurance premiums have experienced a significant rise in states like Florida and California for years, and this affordability crisis is now rapidly expanding nationwide.

According to LendingTree’s 2026 State of Home Insurance report, nationwide home insurance rates increased by nearly 47% between 2020 and 2025.

In the most severely affected states, the 2025 rate increase was approximately three times the national average. Colorado recorded a 18.3% jump, with Minnesota and Iowa close behind at 17% and 14.7%, respectively. No state analyzed by LendingTree saw a decrease in insurance rates during that period.

“Homeowners across the country have faced sharply increased rates,” noted Sharon Cornelissen, director of housing at the Consumer Federation of America (CFA). “It’s not just California and Florida anymore.”

Colorado Tops Nation in Home Insurance Rate Increases

Colorado’s insurance rates surged by over 100%, significantly outpacing the nearly 47% national average increase.

Severe weather is the primary driver pushing rates higher. Colorado faced 22 billion-dollar disasters between 2020 and 2024, according to NOAH data, with hail, wildfires, tornadoes, and severe storms contributing significantly, as explained by Mark Friedlander, senior director of media relations at the Insurance Information Institute.

“Both wildfire and hail perils were previously priced conservatively due to stable loss history,” Friedlander stated. “However, a trend of costly loss events since 2020 forced insurers to reassess the state’s risk profile more aggressively.”

Colorado’s Marshall Fire in December 2021, for instance, devastated residential areas near Boulder, destroying over 1,000 homes.

Colorado’s population growth and new construction are increasingly concentrated in “Hail Alley,” the most hail-prone region in the U.S. The state ranks sixth nationally in hail-related claims.

To assist homeowners unable to secure coverage in the private market, Colorado introduced an insurer-of-last-resort option known as the FAIR Plan last year.

The state is also addressing rising costs through its Access Homeowner’s Insurance Enterprise law, signed by Gov. Jared Polis in June. The legislation establishes grants to help homeowners install hail- and wind-resistant fortified roofs, funded by fees on insurers.

However, the grant program will not start until at least 2027, and the law does not mandate insurers to reduce premiums by a specific amount.

Top 10 States with the Highest Home Insurance Cost Increases

Many of these states offered affordable premiums just years ago, but rate hikes now far exceed inflation and wage growth, creating significant pressure for homeowners.

Florida and California—historically ground zero for soaring insurance costs—did not rank in the top 10. Instead, rate increases are concentrated primarily in states west of the Mississippi River.

The steepest premium increases are occurring inland due to secondary perils—namely, severe convective storms and wildfires. These risks have historically been modeled less precisely than named-storm threats, Friedlander noted.

“Insurers are now recalibrating pricing in these regions to reflect a decade of escalating losses,” he added.

Factors Driving the Sharpest Increases in These States

While rate surges are frustrating for homeowners, they are understandable from an insurer’s perspective: severe weather losses are becoming increasingly frequent—and costly—as labor and construction material costs remain elevated.

Hail, Wind Damage, and Wildfires

Many of the hardest-hit states are clustered in the Midwest and Mountain West, not in hurricane-prone coastal areas. In numerous states, deductibles for hail and wind damage are increasing.

Hail is particularly expensive for insurers because a single storm can damage roofs, siding, and other property across thousands of homes simultaneously.

Wildfires add another layer of risk in Western states. The arid climates of Colorado, Utah, Arizona, and California have led to recent catastrophic wildfire losses.

Claims Exceeding Premiums in Three States

LendingTree reported that in Louisiana, Iowa, and Hawaii, insurers paid more in claims than they collected in premiums. While companies can absorb such losses temporarily, they cannot sustain them indefinitely. As claims have caught up with a decade of worsening losses, insurers in these states have been forced to file larger, more frequent rate increases to maintain solvency, Friedlander explained.

Insurers are transferring these costs to customers. “It’s placing increasing pressure on already high housing costs for both renters and homeowners,” Cornelissen of CFA stated.

Role of Reinsurance

For states like Colorado, reinsurance plays a critical role. Reinsurance is insurance for insurance companies, helping carriers absorb financial impacts from large-scale catastrophes.

When reinsurance becomes more expensive, companies like State Farm and Allstate may seek larger rate hikes, raise deductibles, tighten underwriting standards, or exit high-risk areas entirely.

However, higher insurer costs often take time to trickle down, partly because most states require regulatory approval before rate increases take effect. From 2020 to 2024, the median time to approve rate filings was 331 days in Colorado and 305 days in California, according to the Government Accountability Office.

Thus, homeowners may not feel the financial impact of a major catastrophe for a year or more.

How Rate Increases Compare to Nationwide Costs

Between 2021 and 2024, insurers increased premiums in 95% of U.S. ZIP codes, according to the Consumer Federation of America. However, a state can experience significant rate increases without necessarily becoming one of the most expensive places to buy coverage.

Arizona exemplifies this trend. Rates there climbed 71% from 2020 to 2025, ranking sixth nationally. Despite this, homeowners pay an average of $2,225 annually—about 7% below the national average of $2,395.

“A state like Arizona can achieve a large percentage increase from a historically low base while remaining below the national average premium,” Friedlander explained.

Other states face both rapid rate growth and high overall premiums. Nebraska, with a 72% increase (fifth nationally), now ranks second-highest in average annual homeowners insurance costs at $4,956—more than double the national average.

A concerning trend is emerging: homeowners are receiving less standard coverage while paying more. Consumers are now paying higher premiums for what once constituted baseline coverage.

“Homeowners are seeing more of their monthly payments go toward insurance rather than their mortgage,” Cornelissen of CFA noted. “Growing insurance unaffordability is a core component of our housing affordability crisis.”

Strategies for Reducing Homeowners Insurance Costs

While homeowners cannot control weather or approved rate hikes, insurance pricing varies widely. Numerous factors influence actual costs, allowing room for savings.

Here are key strategies for reducing homeowners insurance expenses:

• Shop Regularly: Obtain multiple quotes from different insurers and compare equivalent coverage—not just prices. Insurers adjust rates over time, so a previously expensive company may now be more competitive.

• Increase Your Deductible: A higher deductible typically lowers premiums because you assume more out-of-pocket risk when filing claims. Ensure the deductible amount is manageable after a major loss.

• Bundle Coverage: Many insurers offer multi-policy discounts. Compare combined pricing with separate policies, as bundling is not guaranteed to be the cheapest option.

• Request Available Discounts: Security systems, smoke detectors, and other safety features may qualify for savings. Some insurers reward newer roofs or updated plumbing.

• Invest in Disaster Resistance: Enhancements like roof upgrades, storm shutters, or impact-resistant windows may qualify for premium reductions, depending on your location.

• Review Coverage Limits Annually: Understanding appropriate coverage levels is crucial. Regularly assess limits to avoid overpaying or leaving yourself underinsured.

• Improve Your Credit Score: CFA research indicates homeowners with lower credit scores pay nearly twice as much for insurance. Working with a credit counselor or strategically reducing debt may enhance your score and reduce premiums.

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