Why U.S. home insurance costs have leapt in the past decade

"The cost of home insurance in the United States rose by ~89% between 2014 and 2025, as rapidly climbing home prices, more frequent extreme weather events and inflation impacted insurers and homeowners. ICE analysts share key insights from their recent 10-year study into the forces propelling rising insurance costs across the nation. Over the past decade, home insurance costs have risen rapidly in many parts of the United States."

"Before 2017, the five-year rolling average costs associated with billion-dollar disaster events was consistently less than $100 billion in the U.S. Since 2017, however, those costs have consistently exceeded $120 billion. Increasing costs due to extreme weather events will likely continue since these events are projected to become more frequent and severe, creating mounting cost pressures for federal, state, and local governments, as well as insurance companies and homeowners."

"Premiums are also tied to the amount of coverage (often set by the value of the home) and over the past five years, home values, as well as construction and replacement costs, have risen across the country. Between March 2020 and January 2023, ICE's nationwide Single Family Home Price Index increased by nearly 36%. As home values increase, the amount of insurance coverage purchased generally also increases leading to a rise in premiums even if all other factors remain constant."

Home insurance costs in the United States rose sharply, driven by rising home values, more frequent and severe extreme weather events, and high inflation. Billion-dollar disaster event costs exceeded $120 billion annually since 2017, up from under $100 billion before 2017, increasing pressure on governments, insurers, and homeowners. Mortgage holders face unavoidable insurance costs and homeowners in high flood-risk areas often must buy additional flood insurance. Premiums correlate with coverage amounts set by home values, and a nearly 36% rise in the Single Family Home Price Index from March 2020 to January 2023 has pushed premiums higher.

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