Oklahomans are facing skyrocketing homeowners insurance costs that outpace prices in other states for the same levels of coverage. True to the Allstate’s mascot’s moniker, high prices are causing mayhem as homeowners scramble to cover premiums while the Legislature seeks solutions.
Oklahoma homeowners pay about $6,000 per year in home insurance premiums, while the national average is $2,801, according to Lending Tree. Even in places like California, where wildfires have ravaged the state, or coastal Florida, which is regularly battered by hurricanes, homeowners pay less per year to cover their home than Oklahomans do. State government is taking notice, with calls from both sides of the aisle to help lower costs. Senate Minority Leader Julia Kirt led an interim study session Oct. 7 to investigate causes and solutions regarding Oklahoma’s high prices.
“This study came out of calls and emails from constituents,” Kirt (D-OKC) told attendees. “When enough folks ask you a question, you start to want to look into it more, and that question was from a couple of folks whose homeowners insurance was dropped, and a couple more who had their rates go up are asking those questions. They were wondering, as fixed-income folks, what kind of relief is out there. And at the same time, I read the investigative report in the New York Times did that was really looking across the country of how risk varies and whether that aligns with property insurance rate increases.”
Some attribute increases to rising claims from weather like hail and wind, as Oklahoma Insurance Commissioner Glen Mulready did during his remarks before legislators at the interim study.
“What is driving those rates? I would say weather, but it’s not really even weather, it’s claims,” Mulready told legislators. “Of course, that’s from weather. But claims and inflation. We’ve seen a substantial rise in inflation. Everyone has experienced that in a very negative way. If the cost of a 2×4 goes up 20 percent, your homeowner’s insurance is going to cover that replacement cost. And we’re now past the supply chain issues, but inflation has been a big factor that often gets overlooked. But we sure get our fair share of weather.”
However, reporting from Oklahoma Watch’s J.C. Hallman previously noted that Oklahoma’s neighbors to the north and south have similar numbers of severe weather events, such as hailstorms, but homeowners in Kansas and Texas spend significantly less of their annual income on home insurance — 5.58 percent and 4.62 percent, respectively, compared to Oklahoma’s 6.84 percent, which led the country.
The issue is poised to become a topic in Oklahoma politics for the coming election year, especially with Mulready leaving office and former Sen. Marty Quinn and longtime Farmers Insurance employee Chris Meredith already declared as Republican candidates for the statewide-elected position. The commissioner heads the Oklahoma Department of Insurance, which implements insurance policy from the state Legislature. The department also serves as a regulatory body for insurance companies operating in the state, with an anti-fraud unit and mandated investigations every three years.
Attorney General Gentner Drummond, who is seeking the 2026 Republican nomination for governor, doesn’t believe weather constitutes the sole reason for increases that outpace other states with weather challenges. In a letter to Mulready following his remarks at the Capitol, Drummond pushed back against the term-limited commissioner’s theory about weather claims, citing another story from Hallman.
“There is no justification for the unreasonably high insurance rates in Oklahoma. Conveniently, insurance companies are using Oklahoma weather as a red herring to distract from their profiteering tactics,” Drummond wrote. “There is zero evidence I am aware of supporting a position that Oklahoma’s weather justifies these excessive insurance premiums. Moreover, Oklahoma is one of the most affordable states in the country for costs related to home building and repairs, but Oklahomans are still paying significantly more for home insurance premiums than states with significantly higher home values and costs, such as Texas, California and Florida.”
In his letter, Drummond said insurance companies doing business in the state have raised rates by 50.8 percent since 2019. The national average over that time period is 10.4 percent, he wrote.
“For the benefit of Oklahomans, I encourage [the Oklahoma Insurance Department] to collaborate with my office’s Consumer Protection Unit to combat rising insurance premiums plaguing Oklahoma homeowners,” Drummond wrote. “We intend to use all investigatory tools at our disposal to collect information from these insurance companies to get to the bottom of why Oklahoma’s insurance rates are highest in the nation and will proceed accordingly. This is a significant issue that must be resolved, and with coordinated action to better ensure swifter relief.”
‘We have a very competitive, vibrant free market happening’
While the New York Times piece found that property owners in Enid pay more for insurance premiums than states that see more impactful weather events like hurricanes, Mulready called it problematic. In other states, Mulready said some coverages, such as flood insurance, are written as separate policies or subsidized by state governments. Nineteen states have wind pools that cover wind damage as a separate policy rather than part of a more comprehensive insurance policy that many property owners carry. Most states with those types of pools are on the coast. Damage from wind and hail is typically covered by a single homeowner policy in Oklahoma.
“The author chose three or four locations to compare with Enid, and the key difference is that in those locations, private insurance isn’t available to them. The insurance companies will not write business without assistance from the state government,” he said. “We have a very competitive, vibrant free market happening. But we do not have a wind pool where certain areas of Oklahoma are pulling out of wind risk and charging it to a state entity or something else.”
California created its FAIR plan, allowing property owners at higher risk to purchase a separate policy for fire insurance that covers causes from lightning strikes to internal explosions. However, those policies are often expensive and provide a limited scope of coverage. Those policies were created after insurance companies stopped writing policies for fire or flooding, or left the state altogether, Mulready said.
Oklahoma, on the other hand, has 100 companies doing business in the state, according to Mulready.
“We are maintaining a competitive marketplace here in Oklahoma,” Mulready told legislators. “The good news is we do not have companies leaving our state. We do have a couple who have left, but they have chosen to exit the homeowners insurance marketplace. We don’t have companies leaving our state. We allow companies to rate property for risk. If we were seeing substantial profits being made, this would be a different conversation.”
Mulready said most companies doing business in Oklahoma make modest profits.
“So as long as we have a competitive free market happening, the laws say there is no such thing as an excessive rate,” he told legislators. “Clearly, there are not unreasonable profits being made, and really, there are zero profits being made in our homeowners market for the last five years.”
Still, insurance companies have raked in large profits in recent years nationally. Geico saw a record profit of $7.8 billion last year. The insurance giant writes both property and auto insurance polices in Oklahoma. Allstate grew its net income from $251 million in 2023 to $4.9 billion last year.
There are ups and downs in the industry, however. State Farm lost $6 billion last year, but that was an improvement from its $14.1 billion underwriting loss in 2023. Much of the 2023 losses were attributed to California wildfires.
‘Mayhem and that little lizard’: Marketplace education lacking
Former Texas Insurance Commissioner Robert Hunter told legislators during the Oct. 7 study that the free marketplace is not always enough to keep rates down. He said California insurance costs soared in the 1970s and 1980s until voters passed Proposition 103 in 1986, which created a regulatory system to approve rate increases.
“The key problem in California was that competition wasn’t working and wasn’t an effective force to hold down the rates,” Hunter told legislators.
California property owners pay about $1,300 per year in premiums, according to Nerd Wallet.
“After a couple of years of fighting about whether it was constitutional, it was effective in 1988,” Hunter said. “They were the highest in the nation by a lot. Today, California’s rates are in the middle of the pack. They have probably risen quite a bit because of the fires, but California residents have saved billions from Proposition 103.”
Hunter said the public’s understanding of insurance coverage can also impact how much they pay. Geico’s Gecko character and Allstate’s Mayhem are regularly featured in advertising, often in high-profile broadcasts like the Super Bowl or NBA finals. The ads are attention-grabbing, but they provide consumers with little information about what kinds of products insurance companies are offering, which can leave some unsure of what to purchase. Hunter said that can lead to unnecessary expenses.
“They are confused by unhelpful statements from ‘Mayhem’ and that little lizard that runs around because they don’t say anything about the product,” Hunt said. “The big problem is market knowledge. Buyers and sellers should have enough information to make rational choices. Insurance is too complex, and people don’t want to study it. People approach insurance with boredom and fear. Fear because they know they have to get it, but don’t know how to get it, but abhor it because it’s insurance. Most people find it a very boring topic, so they go to the agent and say, ‘Take me, I’m yours,’ not knowing what company the insurance agency represents.”
In most cases, consumers lack information like what percentage of claims a company denies or how it performs during the claims process. He compared the process to blindly buying a TV and not receiving it or knowing its price until several months later. The insurance process, he added, is far more complicated than buying home electronics.
“If you go to Best Buy to buy a color TV and all you know about it is that it came in a box that says ‘Television,’ you don’t know the price, and you don’t know how it performs because there’s no performance information. Specifications are given in a 50-page contract that nobody reads. And you don’t get the TV until a few months down the road, and you don’t get to test it out before you buy it,” he said. “With insurance, you don’t know if you have a good company until you file a claim.”
‘I felt like I got a kick in the stomach’
When Oklahomans do get down to purchasing property insurance, they are faced with continuous rate increases. Rebekah Williams is an ombudsman system advocate with 21 years of experience advocating for seniors. A Sulphur resident now, Williams’ community sustained significant tornado damage in April 2024.
“A few weeks ago, I received my homeowners insurance renewal, and I noticed an alarming increase in the cost,” she said. “From $350 a month, my premium was going up to about $500 a month. My wind and hail deductible went from $900 to $10,000. Adding my mortgage, housing insurance and property taxes, it would have been almost one of my bi-weekly checks. After paying utilities and a few medical bills, I would have been left with around $500 per month for gas or food, or anything else. As I looked at the new premium costs, I instantly thought of senior citizens and the sole income most have, which is Social Security. Sure, they may not have a mortgage anymore, but how in the world can they continue to pay their homeowners insurance with escalating costs?”
Williams told legislators that having to fight insurance companies over claims can add to trauma. While her home wasn’t damaged significantly, her rates went up.
“Once you have a major catastrophe, you have an additional fight with the insurance companies,” she said. “My insurance premium was $178 a month in 2020. When I got my premium the other day, it was $525. I haven’t had a claim. Nothing has changed. Not one thing. I felt like I got a kick in the stomach. How in the world am I going to afford it?”
Possible solutions sought in 2026 session
Williams said more regulation might ease the cost burden on consumers.
“I don’t know what the total answer is,” she said. “I, however, do propose some kind of regulatory oversight somewhat similar to what the Corporation Commission does to oversee utility increases.”
Ending the practice of tying rates to personal credit scores is one possible solution, Hunter said. In some cases, insurance companies check the credit scores of prospective policyholders, which can influence the cost of premiums. Those purchasing auto insurance, which is required in 49 states, are also subject to credit checks.
“Most Americans don’t think credit scores should be used, but it is always used,” he said.
As of 2024, there are 43 states that allow insurance companies to access credit scores when writing policies for consumers. Oklahoma is one of them.
Hunter also said eliminating price optimization would help lower costs. Price optimizations allow insurance companies to use personal data and AI to help determine a consumer’s willingness to pay higher rates. Oklahoma allows the practice.
“Price optimization is illegal in 20 states,” Hunter said. “I think you should go after price optimization. It really is illegal. Rates are supposed to be related to risk. Price optimization is an evil idea and should be eliminated.”
Fortifying structures against severe weather can help lower claims, which Mulready said was one of the causes of rate increases. Claims for roofs by wind and hail account for 85 percent of claims in Oklahoma. Mulready said some insurance companies offer discounts for homes with fortified roofs, and the state is offering grants to help some homeowners beef them up. The grant program is modeled after a similar program in Alabama.
“The biggest focus is keeping water out of the homes,” Mulready said. “If you lose shingles the way they have it, water isn’t pouring into your house. When the water gets into a house, a $10,000 claim becomes a $50,000 claim. That is focused on taping the seams of that plywood on your roof and sealing it. It involves certain types of shingles that are impact-resistant. That’s the program we’re doing. We have phased it in slowly so that we can do it well and folks can have a good experience. We’ve completed 50 homes where grants have been paid out. We have been issuing up to $10,000 grants to homeowners to fortify their roofs, and we have had 300-plus applications.”
Mulready said updating building codes to require more impact resistant materials and construction of new structures could also help cut down on costs, though he said that process is complicated.
“I would love to see that in Oklahoma, though I know it’s a steep climb for a lot of communities,” he said.
Clinton Mora is a reporter for Trending Insurance News. He has previously worked for the Forbes. As a contributor to Trending Insurance News, Clinton covers emerging a wide range of property and casualty insurance related stories.