One in four U.S. homeowners have been dropped by their insurer last year, according to a new survey.

Half of those lucky enough to still hold a homeowner insurance policy told personal finance company ValuePenguin, part of LendingTree, that they are worried their properties will become uninsurable—double the rate reported in 2024.

Why It Matters

Homeowner insurance premiums have skyrocketed across the country over the past few years, as companies facing rising costs—including for reinsurance and repairs—and higher catastrophe exposure pass these expenses on to policyholders.

In some of the country’s most disaster-prone areas, companies have cut coverage by either refusing to renew existing policies or announcing they would not accept any new applications.

Those who have had their policies canceled or not renewed stand to lose everything once the next extreme weather inevitably strikes should they not be able to find an affordable alternative—as the recent wildfires in Los Angeles County have shown.

What to Know

While the number of homeowners dropped by their insurer is significant, it is still much smaller than that of policyholders who have seen the cost of their coverage rise in 2024—two in three (67 percent) across the country. That was down from 72 percent the year before—which saw dramatic rate hikes.

Among those who have reported increases, 38 percent said their rates were now 10 percent or higher.

A majority of homeowners think that things won’t get better this year. Three-quarters (75 percent) believe that their rates will rise throughout 2025, and 44 percent said premiums are more difficult to afford now than in prior years.

Many are taking matters in their own hands, even as the result could be risky.

Almost a quarter (24 percent) of policyholders think home insurance is not worth the expense, and 31 percent have considered self-insuring—which means that, should their home be damaged in a natural disaster, they would have to pay for repairs out of their own pockets.

To save money, 34 percent said they have downgraded or reduced their coverage—a move that could put them on Fannie Mae’s so-called “blacklist” of properties that do not meet its standards to qualify for conventional loans.

The survey was conducted among nearly 2,000 U.S. consumers on February 20 and 21, 2025.

Why Are a Growing Number of Homeowners Being Dropped?

“The effects of climate change and inflation are compounding each other,” Rob Bhatt, lead insurance analyst at LendingTree, told Newsweek.

“An uptick in natural disasters has insurance companies paying to rebuild more homes than normal. Meanwhile, the cost of rebuilding each one is much more expensive than it was even just five years ago. Unfortunately, insurance companies pass these types of cost increases along to customers in the form of higher rates,” he added.

Insurance companies justify dropping hundreds of customers by saying that they need to manage the amount of risk they take on.

“They are dropping customers to reduce the number of homes they insure in areas susceptible to major natural disasters,” Bhatt said. “These include homes exposed to severe coastal weather, severe wind and hail events and/or wildfires, depending on the risks in a particular area.”

Will This Number Continue Rising?

According to Bhatt, there are signs that home insurance costs and prices are now stabilizing.

“Insurance companies have raised their rates in several states over the past few years to meet the current economic challenges. There is an overall sense that these rate hikes are allowing them to cover their costs again,” he explained.

“That said, a spike in natural disasters or an uptick in inflation could reverse this positive momentum.”

What Do Homeowners Risk?

Homeowners with a mortgage would likely be required by their lender to get insurance.

“This means you’re going to have to spend extra time looking for insurance, and you may end up paying a lot of money for minimal coverage,” Bhatt said.

“If you can’t get insurance yourself, your lender will get insurance for you through a process known as forced placement. Force-placed home insurance tends to be considerably more expensive than insurance you can get through normal consumer channels,” he explained.

“No one can make you get insurance if you own your home outright. However, going without insurance can leave you in a financial bind if a disaster does strike.”

Bhatt said he would recommend self-insurance only “to someone who wouldn’t face financial hardship if their home was suddenly destroyed.”

He added in a statement: “I can’t think of very many people in this position. Self-insurance works best if you never have a disaster. Unfortunately, you don’t get to choose whether you’ll have a disaster.”

What Can Homeowners Do?

Bhatt said that it is important for homeowners to shop around before getting a policy.

“Get quotes from a few different companies to find the best rates. The policyholders we surveyed who shopped around for home insurance and switched insurers saved an average of $1,034/year,” he said.

Policyholders should also make sure to ask their insurers about any discounts that may be available to them.

“Although only 56 percent of policyholders asked for a discount, 70 percent of those who asked for a discount received one, saving an estimated $781 annually,” Bhatt said.

“If you’ve renovated your home recently or installed a new home monitoring system, you may qualify for a discount you may not have known about when you set up your current policy.”

Raising one’s deductible is another way to lower a homeowner’s insurance bill.

“Your deductible is the amount that comes out of your pocket for claims. You don’t want it to be too high. But the savings you’ll get from increasing your deductible to the upper end of your comfort level are usually worth it,” Bhatt said.

A deductible can be no more than 5 percent for a homeowner to qualify for a conventional loan.

“Finally, avoid filing claims for relatively minor damage or losses that you can afford to cover out of your own pocket,” Bhatt said. “Most home insurance companies raise your rates after a claim of any size. Many will drop you if you have two or more claims within two or three years, even if they are all for small dollar amounts.”