Why Did My Homeowners Insurance Go Up?

Inflation, severe weather, and natural disasters are driving up homeowners’ costs across the country. But factors specific to you and your home may be at play, too.

Taylor Milam-Samuel
Taylor Milam-Samuel
  • 8+ years writing for major outlets, including MarketWatch and Business Insider

  • Master’s in Education

Taylor Mlam-Samuel is a personal finance writer and credentialed educator. When she’s not helping readers better save and spend money, she can be found teaching.

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Danny Smith
Edited byDanny Smith
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Danny Smith
  • Licensed auto and home insurance agent

  • 4+ years in content creation and marketing

As Insurify’s home and pet insurance editor, Danny also specializes in auto insurance. His goal is to help consumers navigate the complex world of insurance buying.

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Updated November 1, 2023

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Home insurance prices continue to rise after a 7% increase in 2022. Homeowners can expect an additional 9% increase in 2023. Some factors causing the price increase are outside your control, but you can take certain steps to minimize the effect on your wallet.

You can offset some of these increased costs by focusing on your claims history, credit score, and which insurance company you choose.[1]

Here’s everything you need to know about higher rates and how to get the best deal on coverage.

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Big-picture factors affecting home insurance prices

Homeowners insurance companies earn money by charging customers premiums for coverage and then investing the money to make additional returns in anticipation of future claims. When insurers pay more in claims than they earn, the company experiences a loss.

Over the past two years, insurance companies have suffered significant losses, which can affect their ability to pay claims and meet other financial obligations. To compensate for the financial losses, insurance companies increase premiums.[2]

Most factors causing prices to increase are external factors that you can’t control, creating a frustrating cycle for homeowners. But even though you can’t stop the price increases, it’s essential to understand why it’s occurring so you can prepare for the costs.

Here are some of the key factors affecting home insurance rates.

Inflation

Inflation continues to increase the costs of consumer goods like gasoline, food, travel, and cars, so naturally, inflation also affects insurance costs.[3] When prices increase due to inflation, it affects all sectors of the economy, including homeowners insurance premiums.

Severe weather

Severe weather is becoming increasingly common, in part due to climate change. Insurance companies determine premiums based on the risk of a home insurance claim, and severe weather events are often the most common reasons for cost increases.[4]

You can expect to pay two and a half times more than homeowners in low-risk locations if the Federal Emergency Management Agency (FEMA) determines your home is in a “high-risk” area due to extreme weather.

Natural disasters

As weather patterns become less predictable and instances of severe weather increase, natural disasters occur more regularly.

Wildfires, hurricanes, and tornadoes can lead to extensive home damage, which costs insurers more than typical claims.[4] In preparation for the increased costs, insurers charge homeowners more for coverage.

Home prices

Home prices have increased dramatically over the last few years, and construction, labor, and building materials costs have increased alongside them, which means home insurance costs have also increased.[5]

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Property and homeowner-related factors affecting insurance rates

Home insurance increases might also be due to factors related to your property, financial profile, or claim history.

The good news is that some factors affecting your home insurance rates are in your control, so you might be able to make changes to decrease the costs. But even if you can’t, it’s helpful to understand how different factors affect costs to avoid surprises in your bill.

Here are the property-related factors affecting your insurance costs.

Claims history

Insurers can use CLUE (Comprehensive Loss Underwriting Exchange), a claims-information report, to review your claims history and determine how risky it might be to provide coverage.

If you have personal property insurance claims on your account, it can cause your premiums to increase.[6]

Home age

Your home’s age, including its electrical, heating, and plumbing, can affect how much you pay for insurance. Older homes typically cost more to insure.[7]

Home construction

The construction of your home can affect how much your home insurance costs.

For example, if you own a home on the East Coast, it might cost less to insure a brick house since it can better handle wind damage. But if you live in an area with earthquakes, homeowners insurance rates might be cheaper for a house with a wooden frame since it’s better suited for earthquakes.[1]

Your credit history

Your credit history affects your home insurance premium since insurers factor credit scores into a credit-based insurance score to determine how risky you are to insure.

Homeowners with higher scores can usually secure lower insurance rates. The reverse is also true: Homeowners with lower scores often pay more for coverage.[1]

Your insurance history

If your homeowners insurance policy lapses or you fail to have coverage, your insurer may consider you high risk, which often results in rate increases. It can also make finding a policy from other insurers more challenging once you have a lapse in coverage on your record.

How Much Homeowners Insurance Do You Need?

How Much Homeowners Insurance Do You Need?

Average homeowners insurance costs by state

Your location is one of the most critical factors when it comes to the cost of home insurance. Where you live in the United States determines the likelihood of severe weather, natural disasters, and rebuilding costs, which insurers consider as they determine rates.

Here’s how much Americans can expect to pay for home insurance coverage in the following states.

StateAverage Annual Cost of Home Insurance
Alabama$2,810
Alaska$1,113
Arizona$1,590
Arkansas$2,731
California$1,350
Colorado$3,059
Connecticut$1,485
Delaware$1,076
Florida$9,079
Georgia$2,190
Hawaii$1,287
Idaho$1,177
Illinois$1,768
Indiana$1,741
Iowa$1,908
Kansas$3,307
Kentucky$2,078
Louisiana$4,231
Maine$1,163
Maryland$1,497
Massachusetts$1,610
Michigan$1,488
Minnesota$2,183
Mississippi$3,221
Missouri$2,457
Montana$1,597
Nebraska$3,459
Nevada$1,089
New Hampshire$1,181
New Jersey$1,177
New Mexico$2,045
New York$1,894
North Carolina$1,846
North Dakota$2,275
Ohio$1,176
Oklahoma$5,027
Oregon$1,058
Pennsylvania$1,249
Rhode Island$1,756
South Carolina$2,487
South Dakota$2,590
Tennessee$2,128
Texas$3,801
Utah$1,026
Vermont$906
Virginia$1,334
Washington$1,163
Washington D.C.$1,171
West Virginia$1,385
Wisconsin$1,288
Wyoming$1,928
Table data sourced from real-time quotes from Insurify’s partner insurance providers and quote estimates from Quadrant Information Services. Actual quotes may vary based on the policy buyer’s unique profile.

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10 cities with the most expensive homeowners insurance

You can expect to pay more for coverage if you own a home in a city with a high risk of severe weather or natural disasters.

The following cities have some of the most severe weather risks, like flooding and tornadoes, and often see severe home damage. Insurers know this and don’t want to keep paying claims in these areas, as it’s not profitable, so they increase rates drastically.

Here are the most expensive cities for homeowners to find insurance coverage.

CityAverage Annual Premium
Hallandale Beach, Florida$12,578
Hialeah, Florida$12,319
Miami, Florida$11,258
Lake Worth, Florida$10,741
Orange Beach, Alabama$9,264
Chauvin, Louisiana$8,042
Oklahoma City, Oklahoma$7,546
New Orleans, Louisiana$7,518
Newalla, Oklahoma$7,268
El Reno, Oklahoma$7,226
Table data sourced from real-time quotes from Insurify’s partner insurance providers and quote estimates from Quadrant Information Services. Actual quotes may vary based on the policy buyer’s unique profile.

How to lower your home insurance costs

Even though you can’t change the effect of inflation or natural disasters, you can take other steps to lower the cost of homeowners insurance.

Here’s how to lower your home insurance premium, especially if you’re dealing with a rate increase:

  • illustration card https://a.storyblok.com/f/162273/x/fa11c1fe75/comparison-website.svg

    Comparison shop

    Comparing quotes from multiple insurance companies is one of the most effective ways to lower your insurance premium when you’re looking for a new policy. Check the typical rates for your state and gather quotes from a handful of companies before selecting an insurer.

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    Opt for a higher deductible

    Your deductible is the amount you’re responsible for paying when you file a claim. Higher deductibles equate to lower insurance premiums since you agree to cover a more significant portion of future claims.

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    Apply for discounts

    Ask your insurance agent about potential discounts for coverage. For example, you may qualify for a reduced rate if youre 55 or older or bundle insurance products, like auto and homeowners insurance policies, with the same insurer.

  • illustration card https://a.storyblok.com/f/162273/100x100/4ec24627d2/flood-coverage.svg

    Weather-proof your home

    Check with your insurance company about steps you can take to make your home and the things in it more weather-resistant. Adding storm shutters or reinforcing your roof might secure a lower rate, for example.

Home insurance costs FAQs

As you shop for the best rate for home insurance, it’s essential to understand the basics. Here are answers to some of the most frequently asked questions about home coverage.

  • How much has homeowners insurance risen in 2023?

    On average, home insurance premiums increased by 9% in 2023. The average homeowner went from paying $1,636 to $1,784, according to Insurify data.

  • Does home insurance normally increase every year?

    It depends on factors like material costs, location, weather, and more. Due to rising inflation and more natural disasters, the average insurance premium increased by 9% in 2023.

  • How much does homeowners insurance cost?

    The average cost of homeowners insurance is $1,784 per year. Factors like your credit score, home’s age, claims history, and location affect how much you pay. Depending on those factors, you might pay more or less for coverage.

  • Will filing a claim make your premium increase?

    Typically, yes. Filing an insurance claim will usually cause your premium to increase. Insurers use your claims history to assess risk. If you filed a claim in the past, it indicates that you might be more likely to do so in the future.[6]

Methodology

Insurify’s team of data scientists analyze millions of home insurance quotes and weigh publicly available reviews, claims payout rates, complaint indexes, financial strength scores, company reputations, and proprietary quoting data. Our editorial team applies this insight to inform our unbiased reviews and recommendations.

Sources

  1. Insurance Information Institute. "12 Ways to Lower Your Homeowners Insurance Costs."
  2. Insurance Information Institute. "Incurred losses by state."
  3. Bureau of Labor Statistics. "CONSUMER PRICE INDEX – SEPTEMBER 2023."
  4. Insurance Information Institute. "2021 Insurance Fact Book."
  5. The White House. "Housing Prices and Inflation."
  6. Office of the Insurance Commissioner - Washington State. "CLUE (Comprehensive Loss Underwriting Exchange)."
  7. State of California Department of Insurance. "Residential Insurance: Homeowners and Renters."
Taylor Milam-Samuel
Taylor Milam-Samuel

Taylor Milam-Samuel is a writer and credentialed educator who is fascinated by how people earn, save, and spend their money. When she's not researching financial terms and conditions, she can be found in the classroom teaching.

Danny Smith
Edited byDanny Smith
Photo of an Insurify author
Danny Smith
  • Licensed auto and home insurance agent

  • 4+ years in content creation and marketing

As Insurify’s home and pet insurance editor, Danny also specializes in auto insurance. His goal is to help consumers navigate the complex world of insurance buying.

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