Insurance costs have become a major concern as rising premiums add to the already high costs of homeownership. Since the Great Recession, homeowners insurance premiums have increased by 74%, outpacing the 40% rise in home prices, according to the Joint Center for Housing Studies of Harvard University. Between 2020 and 2023 alone, premiums grew by 20%. These increases apply to both general homeowners insurance and hazard-specific policies for floods, earthquakes, and other natural disasters.

Although the property insurance industry is heavily regulated, unlike the federally regulated housing finance system, state governments oversee property and casualty (P&C) insurance, leading to varied regulatory approaches. States often control premium rates in detail, sometimes creating tensions in the process. While the rate of racial and income disparities in insurance pricing has declined over the past few decades, financial factors, such as credit scores, still influence rates. The growing risks associated with climate change are also a main driver of premium hikes.

With increasing costs, there is a growing home equity protection gap. In 2022, an estimated 12 percent of homeowners did not have homeowners insurance. This occurs at the same time the share of homeowners without a mortgage and associated lender insurance requirements remains above 40 percent. These figures do not take into account the sizable share of renters who lack renters insurance coverage for their homes’ contents. Read more