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Rising Home Insurance Rates: What You Need to Know and How to Cope

In recent years, American homeowners have faced a significant increase in home insurance rates. According to a recent study by LendingTree, the average cost of home insurance has surged by nearly 38% since 2019. This sharp rise in insurance premiums has been particularly pronounced in states like Arizona, Illinois, and Nebraska, where residents are paying over 55% more than they did just a few years ago. Let’s delve into the reasons behind these rising costs and explore what this means for homeowners across the country.

The Big Picture: National Trends

On average, homeowners in the United States now pay $2,478 annually for home insurance. However, this figure masks significant variations between states. In Oklahoma and Nebraska, for instance, annual premiums are around $5,478 and $5,363, respectively—more than double the national average. Arizona has seen the steepest increase, with rates jumping by a staggering 62% since 2019. In contrast, states like Alaska, Vermont, and West Virginia have experienced much smaller increases, with rates rising by only 6.8%, 7.4%, and 9.9%, respectively.

Even within a single year, from January to March 2024, national home insurance premiums have already risen by 5.8%, with Nebraska once again leading the charge with a 13.3% increase. Interestingly, Colorado has seen no change in rates this year, and states like Florida and Maryland have experienced minimal increases of 0.1% and 0.2%, respectively.

Why Are Insurance Rates Rising?

Several factors contribute to the rising cost of home insurance. One of the primary drivers is the increase in home values. As property values go up, the cost to insure these homes also rises. Additionally, inflation and the cost of building materials have surged since 2019. While inflation has started to ease, building costs continue to climb, making home repairs more expensive than ever.

Rob Bhatt, a home insurance expert at LendingTree, explains, “Insurance companies have to repair more homes, and it’s more expensive to rebuild each one than it might have been just five years ago. When their costs of paying claims go up, they turn around and raise our rates. This is affecting prices for just about everyone, including people who haven’t been directly impacted by a natural disaster, or at least not yet.”

Another significant factor is the increasing frequency and severity of weather-related events, a trend linked to climate change. More homes are at risk of sustaining damage from storms, floods, and other natural disasters. Wind and hail claims have accounted for over 42% of all insurance claims filed since 2019. Although fire and lightning claims are less common, they are the most expensive, with the average claim costing $83,519.

The State-by-State Breakdown

Let’s take a closer look at some specific states to understand the regional disparities in insurance rates:

  • Arizona: Homeowners here have seen the highest increase in insurance rates, with a 62% rise since 2019. This means that if you were paying $1,500 annually for insurance in 2019, you’re now paying around $2,430.
  • Nebraska: With a 59.9% increase, Nebraska is not far behind Arizona. The average annual premium here has skyrocketed, putting a significant financial strain on homeowners.
  • Oklahoma: Residents face the highest absolute costs, with annual premiums averaging $5,478. This is due to the state’s high risk of natural disasters like tornadoes and severe storms.
  • Alaska, Vermont, West Virginia: Homeowners in these states have seen relatively modest increases in their insurance premiums, ranging from 6.8% to 9.9%. These states have lower risks of natural disasters and lower overall building costs, contributing to more stable insurance rates.

Coping with Rising Costs

For many homeowners, rising insurance costs can be a source of stress and financial strain. However, there are ways to manage these increases:

  1. Shop Around: Don’t settle for the first insurance quote you receive. Shopping around can help you find more competitive rates and potentially save hundreds of dollars annually.
  2. Bundle Policies: Many insurance companies offer discounts if you bundle home and auto insurance policies. This can lead to significant savings.
  3. Increase Your Deductible: Raising your deductible can lower your premium. However, make sure you have enough savings to cover the higher deductible if you need to file a claim.
  4. Improve Home Security: Installing security systems, smoke detectors, and other safety features can sometimes qualify you for discounts on your insurance premiums.
  5. Review Your Coverage: Regularly review your insurance coverage to ensure you’re not over-insured or under-insured. Adjusting your coverage to better fit your needs can lead to cost savings.


The rising cost of home insurance is a challenge that many American homeowners are grappling with. While the factors driving these increases—such as rising home values, inflation, and climate change—are complex and often beyond individual control, there are steps you can take to mitigate the financial impact. By shopping around for the best rates, bundling policies, and taking advantage of available discounts, you can better manage your home insurance costs and protect your financial well-being.

As we navigate these changing times, staying informed and proactive is key. Understanding the factors behind rising insurance rates and exploring your options can help you make the best decisions for your home and family.