Why did my home insurance go up 25%?
Rising homeowners insurance costs are largely driven by more natural disasters, inflation, and labor shortages. Your rates can also rise because of your claims history, property features, and credit score. Contact your insurer to see whether you qualify for discounts or policy adjustments to lower your rate.
Climate change, inflation and industry woes have caused premiums to soar nationwide. Homeowners insurance rates rose dramatically between 2023 and 2024, according to a Bankrate analysis of rate data from Quadrant Information Services.
The cost of home insurance is still increasing due to the impact inflation has had on the previous losses experienced by the insurance company, the elevated cost of building materials and the high likelihood of future extreme weather-related losses.
The cost of homeowners and tenants insurance depends on a number of factors including: location, age and type of building. use of building (residence and/or commercial) proximity of fire protection services.
Car insurance rates are increasing for several reasons, including more frequent and severe claims, as well as more expensive vehicle repair and replacement costs. Together, this mixture of factors is causing a stark rise in rates.
Travelers is the most expensive homeowners insurance company for $200,000, $350,000, $500,000 and $750,000 dwelling coverage amounts. Rates vary significantly among companies because they each have their own formulas for pricing.
Key takeaways. Inflation is causing the costs of housing materials, car parts, and labor to increase. These factors result in higher insurance rates for homeowners and drivers. To lower premiums, homeowners can explore discounts, maintain a good driving record, and bundle policies.
- Progressive, State Farm and USAA are the cheapest large home insurance companies, according to our analysis.
- Progressive and Travelers offer the cheapest home insurance for homeowners with poor credit.
- Auto-Owners and Progressive have the cheapest home insurance rates for homeowners with a claims history.
Oklahoma, Kansas, Nebraska, Florida, and Colorado are the most expensive states for homeowners insurance. Oklahoma has the highest average cost of homeowners insurance in the U.S. at $5,858 per year.
How often should you change homeowners insurance companies? It's recommended to review and reassess your homeowners insurance policy every one to two years, especially if there's been an increase in your premium or any changes in your policy or personal circumstances that could affect your rates.
What is one way to lower your premiums on your home insurance?
Increase your home insurance deductible
Most people don't like the idea of a higher home insurance deductible, but this is one of the easiest ways to lower your home insurance rate. Yes, you'll pay more out of pocket if you file a claim, but the lower payments may save you a lot in the long run.
The age of your home
If you live in an older home, you may also pay higher home insurance rates. The older the house, the more likely it is that aging materials could lead to damage. Older homes also may not be up to local building codes or current building standards.
Incidents such as accidents (even if you weren't at fault), speeding violations, reckless driving, and driving while intoxicated can increase premiums.
The average annual cost to insure a home in the United States is $1,602 in 2024. That's a 2% increase over the previous year, but an 18% increase from five years ago.
Several factors are behind the rising rates. Severe weather events continue to cause serious damage and costly insurance claims. The rising cost of building materials, supply chain issues and unfilled jobs are driving up the costs of home repairs.
- Travelers: Best car insurance company overall.
- American Family: Best for affordability.
- Auto-Owners: Best for financial strength.
- State Farm: Best for customer satisfaction.
- USAA: Best for military members.
- Amica: Best for consumer satisfaction.
- Auto-Owners: Best for using an agent.
- Chubb: Best for high-value homes.
- Country Financial: Best for discounts.
- Erie: Best for coverage.
- NJM: Best regional insurer.
- USAA: Best for military members and veterans.
| Rank | Company | Customer Satisfaction Rating (out of 10) |
|---|---|---|
| 1st | USAA | 8.74 |
| 2nd | Erie | 8.57 |
| 3rd | Farmers | 8.22 |
| 4th | American Family | 8.16 |
| Rank | State | Average annual rate (full coverage) |
|---|---|---|
| 1 | Louisiana | $2,883 |
| 2 | Florida | $2,694 |
| 3 | California | $2,416 |
| 4 | Colorado | $2,337 |
The average home insurance cost by state varies with the nationwide average coming in at $2,601 a year. The cheapest state for home insurance is Hawaii at $613 a year, and the most expensive state is Oklahoma at $5,858 a year.
What state has the lowest homeowners insurance rates?
Hawaii Hawaii boasts the nation's cheapest home insurance, with an average premium of just $382 per year for $250000 in dwelling coverage. That means Hawaii's average price for home insurance comes in at $1046 less than the national average.
Car accidents and traffic violations are common explanations for an insurance rate increase, but other reasons why your car insurance rate can go up include changing your address, adding a new vehicle or driver, increases to claims in your ZIP code, and increases to car repair/replacement cost.
USAA, Nationwide, Travelers, Erie, Geico and Progressive are the cheapest car insurance companies nationwide, according to our analysis. Car insurance costs continue to rise as we approach fall.
While choosing a higher deductible can mean lower monthly premiums, it also means you have a higher out-of-pocket responsibility, so it's important to choose a deductible you can afford.
Oklahoma is the most expensive state for homeowners insurance, in fact, averaging $5317 per year, nearly double the national average of $2777, according to Insurance.com, an online insurance information provider and marketplace.
