Homeowners insurance rates have risen dramatically, from an average of $2,656 annually in 2021 to $3,303 in 2024.

That’s a 24% increase, more than twice as fast as the rate of inflation in the same timeframe.  

But the increase hasn’t been uniform: According to a new report from the Consumer Federation of America (CFA), some states have been hit harder than others.

The sharpest spike was in Utah, where they soared 59%, from an average of $1,126 in 2021 to $1,795 just four years later. The chief culprits, according to Utah Insurance Commissioner Jon Pike, are more homes being built in wildfire-prone areas and a traditionally underpriced insurance market finally adjusting for inflation.

The top five biggest increases were in: 

1. Utah: +59% 
2. Illinois: +50%
3. Arizona: +48%
4. Pennsylvania: +44%
5. Nebraska: +35%

“The skyrocketing price of insurance premiums is deepening the housing crisis … and homeowners across the country are feeling the strain,” CFA Director of Housing Sharon Cornelissen said in a statement. 

The report analyzes data from Quadrant Information Services, which collected rates from more than 100 insurance companies across nearly every ZIP code for a homeowner with a mid-range credit score and a house with a $350,000 replacement value policy.

In only three states did premiums decline or remain stagnant.  

• West Virginia: -24%  
• Mississippi: -15%
• Wyoming: No change

According to the CFA, the most expensive states to insure your home are Florida, Louisiana, Oklahoma, Kentucky and Nebraska. In Florida, a homeowner with fair credit and $350,000 in dwelling coverage could expect to pay $9,462 a year, or $789 a month, in 2024. That’s a bump of nearly 30% from 2021, when the same policy would average $7,344.  

Several factors have driven up premiums, according to the CFA:

• Climate change: Wildfires, flooding and severe weather events are damaging more homes
• Inflation: Rising labor, construction and building material costs have made homes more expensive to build and repair.
• Reinsurance: The reinsurance market is tight and rates have increased as providers pass the cost onto customers
• Weak regulatory oversight: State insurance commissioners have given insurers much more leeway in raising premiums 

To address this crisis, the CFA’s report urges increased action by both the state and federal government to regulate insurers and protect consumers. 

“The insurance commissioners and lawmakers we depend upon to ensure that this critical coverage is available and affordable have not done enough,” said CFA Director of Insurance Douglas Heller. “Americans are stuck buying insurance from companies that our public officials seem afraid of.”

Despite rising premiums, there are ways homeowners can lower their monthly premiums.  

1. Bundle home and car insurance 

Many insurers offer bundling discounts for taking out both home and auto policies. Not only do members save, but they enjoy the convenience of all their policies being on the same app or website.

One of the country’s largest home insurers, Allstate earns praise for its customizable policies and competitive rates, and customers can save up to 25% by bundling car and auto policies.

Bundling isn’t always cheaper, however, so get several quotes with the same coverage limits and deductibles when you are comparing.  

2. Don’t keep coverage you don’t need 

If your premiums are going through the roof, see if you need all the coverage you’re paying for.

To estimate how much insurance you need, you should find out the cost of rebuilding your home. Check with a local real estate agent or builders association about per-square-foot building costs in your area. Then multiply that figure by the total square footage of your home.

It’s worth reviewing your personal property policy, as well. If you sold your art collection, for example, you can cancel the floater you took out on it.

Don’t skimp on coverage simply to save money, though, or you could pay dearly if disaster strikes.

3. Raise your deductible 

If you’re in a position to cover more out-of-pocket costs, you could save on month-to-month costs by raising your annual deductible. According to the Insurance Information Institute, an increase from j$500 to $1,000 could save you as much as 25% on premiums,

Take a good look at your emergency fund and make sure you can afford the upfront costs if something happens to your home.  

4. Improve your credit

In most states, insurance companies consider your credit history when calculating your monthly premiums. While your insurance score is different from your FICO score, it’s determined using many of the same criteria.

A strong track record of on-time payments can help boost your insurance score, as can paying the full balance every month.’

5. Comparison shop

Look for insurers that issue policies in your state, meet your budget requirements and offer the coverage you need. Any contenders should also be financially solid (usually with an A+ or better from A.M. Best) and have high customer satisfaction scores from J.D. Power.

Nationwide made our list of the most affordable homeowners insurance and ranked above average for customer satisfaction with the claims process in J.D. Power’s 2024 survey.

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