US home insurance rate increases outpace inflation. Where NJ stands

If you think your budget has been hard to make lately, you might look at your insurance bill.

A 45.8% increase in regulator-approved home insurance rates is one that’s severely impacting housing affordability.

A new report from LendingTree, a leading online loan marketplace, found that home insurance rates has been rising nearly twice as fast as inflation in recent years.

The findings were compiled by analyzing S&P Global RateWatch data for home insurance rate changes, and the U.S. Bureau of Labor Statistics for inflation data.

From 2020 to 2025, there was a 19.7 percentage point gap between this 45.8% home insurance rate increase nationwide and the 26.1% inflation rate. This means that home insurance rates rose about 1.8 times faster than inflation during this time, according to the report.

Because homeowners insurance is an essential part of homeownership, protecting your property against major damages and providing liability for accidents, LendingTree home insurance expert Rob Bhatt said in the report that “this trend has put strains on family budgets across the spectrum.”

The widest gap between home insurance increases and inflation occurred between 2023 and 2024, the report said. In 2023, home insurance rates rose by 12.5% while inflation was 2.9%, and in 2024, home insurance rates rose by 10.7% while inflation was 3.4%.

The gap eased a bit in 2025, though, with home insurance rates and inflation sitting at 5.9% and 2.7%, respectively, according to the report.

While home insurance rate hikes outpaced inflation in every state, the report ranked all 50 U.S. states and the District of Columbia by how the gap was in each location.

New Jersey ranked 39th overall. Here, home insurance rates increased by about 32.1% from 2020 to 2025, while the inflation rate is 26% — a 6.1 percentage point gap, according to the report.

And in just 2025, home insurance rates increased by 7.5% in New Jersey, while the inflation rate was just 3.6%. This is a 3.9 percentage point gap, according to the report.

Overall, Colorado (74.4), Iowa (69.7), Minnesota (61.9), Utah (50.8) and Nebraska (45.9) ranked in the top five for having the largest percentage point gaps between home insurance rate changes and inflation from 2020 to 2025.

And for just 2025, Colorado (15.9), Minnesota (14.6), Iowa (12.3), Illinois (11.3) and Delaware (8.5) were the five states with the largest percentage points gap, the report said.

Bhatt credits the uptick in large-scale natural disasters, as well as the increasing costs of building materials and labor, for the widening gap nationwide. But easing in 2025 may signal that home insurance prices are stabilizing and inflation is cooling, according to the report.

Maddie McGay is the real estate reporter for NorthJersey.com and The Record, covering all things worth celebrating about living in North Jersey. Find her on Instagram @maddiemcgay, on X @maddiemcgayy, and sign up for her North Jersey Living newsletter. Do you have a tip, trend or terrific house she should know about? Email her at MMcGay@gannett.com.