If you own property, you've probably noticed your insurance renewal came in significantly higher this year. You're not imagining it — homeowners insurance costs rose 12% nationally in 2025, and some states saw increases of 20% or more.
The average homeowner now pays about $2,950/year. Three years ago it was around $2,050. That's a $900/year increase that most people's budgets didn't plan for.
Why it's happening:
Climate disasters are getting more expensive. Severe storms caused over $50 billion in insured losses in 2025 — the third consecutive year above $50 billion. Insurers are passing those costs directly to policyholders everywhere, not just in disaster-prone areas.
Construction costs remain elevated. When a claim happens, it costs more to repair or rebuild. Higher repair costs mean higher premiums for everyone.
Reinsurance (insurance for insurance companies) has gotten dramatically more expensive. In Florida, reinsurance accounts for up to 40% of your premium.
The most expensive states for homeowners insurance in 2026:
Florida: $7,500-8,300/year (yes, really) Louisiana: $5,500-6,500/year Nebraska: $5,800-6,200/year Oklahoma: $5,200-5,800/year Texas: $4,500-5,500/year
The cheapest:
Hawaii: $400-650/year Vermont: $900-1,100/year New Hampshire: $950-1,100/year Oregon: $950-1,200/year Idaho: $1,000-1,200/year
What you can do:
Shop every year. The same coverage can vary 40-60% between insurers for the identical property.
Raise your deductible. Going from $1,000 to $2,500 can cut premiums 15-25%.
Bundle home and auto. Typical savings of 10-20%.
Upgrade your roof. Insurance companies give significant discounts for newer roofs and impact-resistant materials. A $10,000 roof replacement can save $1,500-3,000/year on premiums in storm-prone states — it pays for itself in 3-5 years.
Compare insurance costs for any state:
Factor insurance into your full mortgage payment:
Next week: The salary you actually need to buy a house in every state (the numbers have changed a lot in 2 years).
— The Numbers Letter