Why Did Your Homeowners Insurance Go Up? (Updated 2024) – Policygenius (2024)

April 2024 update: What to do if you're struggling to find coverage

Homeowners in areas at high risk of hurricanes, tornadoes, wildfires, and other natural disasters have seen their rates skyrocket or been dropped by their home insurance company altogether. To get your home protected again, our expert home insurance agents at Policygenius can walk you through alternatives to traditional home insurance to help you find a policy at the lowest price possible — whether that's through surplus lines carriers, regional insurers, or your state’s FAIR plan.

Around a month before homeowners insurance renewal, your insurer will notify you of any changes to your coverage or rates for the coming year. Most years, these changes are either nonexistent or just small enough for homeowners not to notice. But last year, homeowners in every part of the country saw their insurance rates go up by hundreds, even thousands of dollars in certain states.

In fact, home insurance premiums were up an average of 21%, according to a Policygenius analysis of policy renewals from May 2022 to May 2023. [1] For homeowners whose premiums went up, the average increase was $244.

In this guide, we’ll help you understand why this may have happened, share insurance rate predictions for 2024, and what you can do to lower your premiums.

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Home insurance rate predictions for 2024

Homeowners can expect rates to continue to climb in 2024 due to severe weather conditions pushing many home insurance companies to raise premiums and become more selective in who they insure.

Wildfires out West, hurricanes in the South, and flooding in inland parts of the country have all contributed to home insurance companies pulling out of many states and raising premiums to counteract the outsized risk of homeowners filing claims.

We've already seen national insurers including State Farm, Allstate, Nationwide, and Farmers either pull out of states completely or reduce their exposure in high-risk areas.

Ellen Carney, principal analyst at Forrester, predicts this trend to continue. "Expect another dozen insurers to follow the likes of AIG, Allstate, and others and scale back their business in California, Florida, Louisiana, and now North Carolina, pushing those exposures into the laps of state regulators."

As it becomes increasingly more difficult for homeowners in high-risk areas to find coverage on the traditional market, expect an increase in policies through in 2024.

E&S insurers are able to offer coverage to high-risk homeowners since they’re not part of the admitted (AKA traditional) insurance market. This means they don’t have to run policy forms or rate increase requests by their state’s department of insurance. In turn, they can take on more risk — and charge higher insurance premiums to offset that risk.

Why did my homeowners insurance go up?

  1. Continued inflation going into 2024

  2. More extreme natural disasters

  3. Your house is older and due for upgrades

  4. Your insurance score went down

  5. Attractive nuisances

5 factors behind rising home insurance premiums

If you're one of the 94% of homeowners who renewed their policy last year just to find out your home insurance premiums went up, you’re probably wondering how this happened. [2] Here are a few of the most common reasons your homeowners insurance rates went up.

1. Coverage changes due to rising construction costs & inflation

In some cases, your insurer will increase your rates because of something within your control — like if your roof needs to be replaced or you filed a claim recently. But the fact of the matter is home insurance premiums are going up everywhere due to the increased cost of labor and construction materials thanks to supply chain issues and high inflation that started in 2020.

Your rates are based heavily on how much dwelling coverage is in your policy — this is the part of your home insurance that pays to rebuild your home if it's damaged or destroyed. Higher rebuild costs due to inflation means homes are requiring higher dwelling coverage limits to keep up with the rising prices.

This has led to higher home insurance rates across the board, though there may be some hope on the horizon.

According to the U.S. Bureau of Labor Statistics, the rising cost of construction materials we saw over the last three years is finally beginning to taper off:

  • Material goods for new residential construction only increased 4% in 2022, compared to 20% in 2021. [3]

  • Asphalt roofing materials only increased 6% over the last year, compared to 15% in 2021. [4]

  • Lumber and wood was down 42% over the last year. [5]

However, the labor shortage in the construction industry continues to remain a problem for insurers —and in turn, homeowners. There were 431,000 construction job openings as of September 2023 [6] — nearly three times the number expected by the U.S. Bureau of Labor Statistics. [7]

2. More extreme natural disasters

From worsening hurricane and wildfire seasons to unexpected cold snaps in Texas, the home insurance industry has experienced record-setting claim payouts and financial losses over the past few years. As a result, many insurance companies are increasing rates to pay for these losses and to ensure they don’t go bankrupt after future climate disasters.

As of September 2023, the U.S. saw 23 billion-dollar disasters — a record for this point in the year. [8] And in just the first half of 2023, the property and casulty insurance industry saw $24.5 billion in losses — this compares with $6.6 billion in losses for this same time period last year.

In states like Florida, Texas, and California that are at high risk of hurricane, tornado, and wildfire damage respectively, construction and labor prices have a tendency to surge in affected areas due to increased demand and shortened supply.

So if you live in one of these high-risk areas out West or in the South and your rates recently went up, you’re likely getting hit by both price inflation and the higher reconstruction costs where you live.

Learn more >> What happens when your home insurance company goes out of business

3. Your home's risk changed

Homes in areas prone to extreme weather generally cost more to insure than homes in areas less impacted by Mother Nature due to both the higher amount and increased frequency of claims.

But it isn't just homes at risk of hurricanes or wildfires that are paying more for insurance. In fact, several states with the highest average rate increases at renewal the last few years are in the middle of the country — in large part due to the higher incidence of hail and wind damage claims in those states.

As climate change continues to alter weather patterns all over the country, certain areas that insurers used to consider to be low risk are now viewed as the opposite, and homeowners in these areas may suddenly be seeing steep premium hikes as a result.

4. Your claims history

Another factor that determines your home insurance rates is your insurance score, which measures how statistically likely you are to file a claim. Carriers typically determine your insurance score by combining your credit score and claims history, among other factors.

A lower insurance score generally means higher premiums, so if your credit took a dip or you filed a claim or two in 2022, that may be the reason your homeowners insurance went up.

Average cost of home insurance after you file a claim

Here's the average annual cost of home insurance in 2022 by claim history.

Number of claims

Average annual cost

0 claims

$1,933

1 claim

$2,101

3 claims

$2,916

5 claims

$4,407

National average rates are based on our analysis of home insurance premiums provided by Quadrant Information Services in March 2022 for ZIP codes in all 50 states plus Washington, D.C. for a sample homeowner with 0, 1, 3, and 5 previous claims.

5. Liability risks

Insurance companies consider swimming pools, trampolines, and even house pets as “attractive nuisances” since they attract children onto your property and put them at risk for injury. If you install a pool or add a new four-legged friend to your family, your insurance company may increase your rates to offset the higher probability of expensive liability claims.

Shoppers have saved an average of 30% on their home insurance

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My home insurance rates went up. What do I do now?

If you notice an increase in coverage amounts or higher rates on your insurance policy at renewal, contact your insurance agent and ask about the changes. They’ll most likely give you a reason and may suggest tangible ways to lower your rates, including increasing your deductible or checking to see if you’re eligible for any discounts.

3 ways to lower your homeowners insurance rates

If you noticed your home insurance rates went up recently and you’re wondering if there’s anything you can do to get them back down, you’ll be relieved to hear that yes, there is.

Following the steps below is a good starting point as you look for ways to save on homeowners insurance.

Ask about discounts

If the discounts section on your policy’s declarations page is more or less empty, make sure to ask your insurance company if there are any you are currently eligible for. Some popular discounts include:

  • Multi-policy discount: If you have two or more policies with the same insurer, like home and auto insurance, this can trim anywhere from 15% to 30% off premiums, depending on your insurer.

  • Claim-free discount: Some carriers will provide discounts if you go a certain number of years without filing a claim.

  • Protective devices discounts: If your home is fitted with deadbolts, smoke detectors, fire extinguishers, fire and burglar alarms, or other protective features, most insurers will reward you with lower rates.

  • First-time homebuyer discount: Most home insurance providers offer discounts to both new homebuyers or owners of recently built homes.

  • Senior citizens discount: If you’re 55 or 60 and older, your insurer may offer up to 10% off your premiums.

  • Loyalty discount: If you’ve been a policyholder with the same insurance company for five years or more, you may be eligible for a loyalty discount of up to 10% off.

Switch to a higher deductible policy

Increasing your policy deductible generally lowers your home insurance premiums. If your rates recently went up and your deductible is currently set to $1,000, consider choosing a higher deductible to get those rates back down. If your home doesn’t face many hazards or you’ve owned your house a while without having to file a claim, then it may be in your best interest to choose a high-deductible policy.

Re-shop your homeowners insurance

You should consider re-shopping your home insurance every year to make sure you aren’t missing out on better coverage or rates with a different insurance company. Policygenius makes it easy to compare affordable home insurance options from multiple insurers — all for free.

Shoppers have saved an average of 30% on their home insurance

Get free quotes

We don't sell your information to third parties.

Frequently asked questions

Why did my homeowners insurance go up in 2021?

Why Did Your Homeowners Insurance Go Up? (Updated 2024) – Policygenius (1)

There are a laundry list of reasons your home insurance premiums went up in 2021, but the main culprits of last year’s rate hikes were rising labor and construction costs, supply chain issues, and the omnipresent threat of climate change.

Why are my home insurance rates going up in 2022?

Why Did Your Homeowners Insurance Go Up? (Updated 2024) – Policygenius (2)

Home insurance premiums are continuing to go up in 2022 for many of the same reasons we touched on for 2021. Insurance companies are increasing rates to make up for billions of dollars in losses due to worsening climate disasters, and surging inflation means homes require more dwelling coverage to pay for rebuild costs. The combination of these factors has resulted in some fairly drastic rate increases in 2022.

Why is Florida homeowners insurance going up?

Why Did Your Homeowners Insurance Go Up? (Updated 2024) – Policygenius (3)

Florida homeowners insurance has always been relatively expensive due to the state’s high hurricane risk. But rates in the Sunshine State have skyrocketed over the last couple years for several reasons, including rising inflation, supply chain disruption, and billions of dollars in losses due to lawsuits over fraudulent roof damage claims. To make up for the latter, insurance companies are passing these losses off to Florida residents in the form of rate hikes.

Why Did Your Homeowners Insurance Go Up? (Updated 2024) – Policygenius (2024)

FAQs

Why Did Your Homeowners Insurance Go Up? (Updated 2024) – Policygenius? ›

Why did your homeowners insurance go up? (Updated May 2024) The increase in expensive natural disasters and higher-than-average labor and construction costs have caused home insurance rates to skyrocket.

Why did my homeowners insurance increase so much? ›

Why homeowners insurance rates are rising. Several factors are making homeowners insurance more expensive: The increase in the number and severity of hurricanes, floods, tornadoes and other harsh weather has led to a spike in claims in many parts of the country.

Why is my policy premium going up? ›

If your car insurance goes up for seemingly no reason when you renew your policy, it's likely due to an increase in risk that's outside of your control. This could include reasons like increased claims in your area (due to more extreme weather damage, more accidents, etc.) and higher car repair and replacement costs.

Why is my home insurance quote so high? ›

Homes in high-risk areas typically have higher premiums. Insurance companies assess the risk associated with your area by looking at the likelihood of severe weather, such as floods, wildfires, and hurricanes, local crime rates, and your home's proximity to a fire station.

Is homeowners insurance going up because of inflation? ›

Inflation itself is also making it more expensive to pay out claims. The average cost of insuring a US home last year was $1,905 — 50% higher than the average of $1,272 in 2019, according to the National Association of Insurance Commissioners and Policygenius.

Why did my home insurance go up in 2024? ›

Increase in supply chain issues & the cost of building materials due to inflation. Home insurance premiums have gone up everywhere due to the increased cost of labor and construction materials thanks to supply chain issues and high inflation that started in 2020.

Are insurance rates going up in 2024? ›

The firm's Home Insurance Projection Report foresees a 6% rise in annual premiums in 2024. The increase will put the national average at $2,522 at the end of the year. With climate experts expecting a devastating hurricane season, home insurance costs are forecasted to surge even higher in 2025.

How much will homeowners insurance increase in 2024? ›

While an intense hurricane season has the potential to cause premium increases next year, Insurify predicts Americans will see a more modest premium increase of 6% in 2024, putting the average annual homeowners insurance rate at $2,522 by the end of the year.

Why does my insurance keep getting more expensive? ›

There are more crashes that are more severe

And that's pushing up insurance rates to cover the costs of repairs and health care for those injured in crashes. Nearly 41,000 people died in US traffic crashes last year, up 13% from 2019, according to the National Highway Traffic Safety Administration.

Why is Allstate so expensive? ›

Many factors contribute to Allstate being expensive, including rising costs for insurance companies and the way it pays its agents. Damage claims and payouts also factor into its higher-than-average rates.

Is it normal for homeowners insurance to go up every year? ›

The insurance industry references the Consumer Price Index to measure inflation and adjusts rates accordingly. It's one big reason why property owners find that their home insurance keeps going up year after year, even if nothing's changed on their property.

Who has the cheapest homeowners insurance? ›

State Farm offers the cheapest homeowners insurance at $174 per month on average, according to a comprehensive review by the MarketWatch Guides team. According to data obtained from Quadrant Information Services, the average cost of a homeowners insurance policy is $2,511 annually or $209 per month.

What is the inflation clause on homeowners insurance? ›

Most homeowner's insurance policies include something called “inflation coverage” or “inflation protection” that is supposed to cover these inflation related replacement cost increases. We may not realize it, but part of our what we pay in premiums is paying for that additional coverage.

Is it normal for home insurance to increase every year? ›

But in the insurance industry, it isn't just your claims history that affects the amount you pay every year. Inflation, policy changes, a hardening market, and even insurance fraud can all contribute to ballooning insurance rates, but that doesn't mean you can't do something about it.

What is one way to reduce the cost of a homeowners insurance policy? ›

Raise your deductible

Deductibles are the amount of money you have to pay toward a loss before your insurance company starts to pay a claim, according to the terms of your policy. The higher your deductible, the more money you can save on your premiums.

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