US Homeowners Insurance Premiums Outpace Inflation as Costs Surge

U.S. homeowners insurance premiums have risen faster than the rate of inflation across the country, according to a new industry report. Data from the National Association of Insurance Commissioners (NAIC) shows that between 2018 and 2024, inflation-adjusted premiums increased by 43% in the West, 27% in the Southeast, 25% in the Midwest, and 18% in the Northeast, as reported by wavebrowsernews.com.

The Bureau of Labor Statistics’ producer price index indicates that this upward trend has continued into 2025, with another 7% increase reported, according to wavebrowsernews.com.

Regional Premium Disparities and State Costs

Costs vary significantly by region and state. In 2024, the Southeast recorded the highest average premium at $1,818 per year, while the Northeast had the lowest average at $1,396, according to wavebrowsernews.com.

More granular data provided by lemonade.com, citing ValuePenguin.com, lists Oklahoma as the state with the highest average annual cost at $4,799, which is 123% above the national average. Other high-cost states include Nebraska at $4,370, Kansas at $3,856, and Texas at $3,694.

At the opposite end of the spectrum, Vermont reported the lowest average annual cost at $929, followed by Maine at $977 and New Hampshire at $1,002, according to the lemonade.com data.

Drivers of Rising Costs and Policy Non-Renewals

Insurers are citing climate change and the rising cost of rebuilding as the primary reasons for higher losses, which have increased both the frequency and severity of claims, according to wavebrowsernews.com.

These risks have led some insurers to stop renewing policies when the potential for profit no longer outweighs the risk. Since 2018, non-renewal increases per 1,000 in-force policies have risen by 216% in the West and 96% in the Southeast, according to wavebrowsernews.com.

The combination of long-term inflation and affordability concerns may lead to households, particularly those with lower incomes, reducing their coverage or becoming underinsured, according to wavebrowsernews.com.

Factors Influencing Individual Premium Rates

While regional averages provide a benchmark, lemonade.com reports that individual premiums range from $1,450 to $5,287 per year nationwide. The final price is determined by several specific variables:

• The location of the property and the age of the building.
• The chosen deductible and total coverage amounts.
• The condition of the home.

According to lemonade.com, homeowners can potentially lower their premiums by increasing their deductibles, installing fire and burglar alarms, or reinforcing the home to be more weather-proof.