Homeowners Insurance Becoming Increasingly Unaffordable Across US, New Insurance Research Council Brief Finds

Latest analysis highlights trends, geographic disparities and cost drivers behind rising premiums

Over the past two decades, the average cost of claims per insured home in the U.S. has risen faster than inflation, driven by natural disasters, rising home repair costs, supply chain disruptions and population shifts into high-risk areas, according to a new research brief by the Insurance Research Council (IRC), an affiliate of The Institutes.

Homeowners Insurance Affordability: Countrywide Trends and State Comparisons finds that insurance expenditures have consistently outpaced income growth, with affordability reaching its lowest point in 2024. Using its Affordability Index, which compares average homeowners insurance costs to median household income, the IRC reports that U.S. households spent 2.09% of income on insurance in 2022, up from 1.19% in 2001. That figure is projected to reach 2.4% in 2024.

“This steady upward trajectory signals ongoing challenges in the insurance market,” said Dale Porfilio, president of the IRC. “From natural disasters and legal system abuse to escalating repair costs and fraud, the pressures on insurance costs are significant, and they are driving premiums higher for consumers.”

The report highlights wide geographic disparities. In 2022, Utah, Oregon and Alaska ranked as the most affordable states for home insurance, while Louisiana, Florida, Mississippi, Oklahoma and Arkansas were the least affordable. Florida, though still the second least affordable, saw a slight improvement from 2021. Legislative reforms enacted in the Sunshine State in 2022 and 2023 have led to fewer property claim lawsuits and increased private insurer participation, though these changes are not yet fully captured in the data.

Key Drivers of Homeowners Insurance Costs

Affordability is shaped by a range of cost factors that differ across states. These include the frequency and severity of catastrophe and non-catastrophe claims, legal and fraud-related costs, and exposure to natural hazards like hurricanes, wildfires and hailstorms.

Porfilio, who is also chief insurance officer at the Insurance Information Institute (Triple-I), noted that, “Understanding what’s driving insurance costs at the state level can help leaders make informed decisions to protect consumers and ensure continued access to essential coverage.”

About Insurance Research Council

The Insurance Research Council (IRC), affiliated with The Institutes, is an independent, nonprofit research organization supported by leading property and casualty insurance companies and associations. IRC provides timely and reliable research to all parties involved in public policy issues affecting insurance companies and their customers. IRC does not lobby or advocate legislative positions.

About The Institutes

The Institutes® are a not-for-profit comprised of diverse affiliates that educate, elevate, and connect people in the essential disciplines of risk management and insurance. Through products and services offered by The Institutes and nearly 20 affiliated business units, people and organizations are empowered to help those in need with a focus on understanding, predicting, and preventing losses to create a more resilient world.

The Institutes is a registered trademark of The Institutes. All rights reserved.

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“From natural disasters and legal system abuse to escalating repair costs and fraud, the pressures on home insurance costs are significant, and they are driving premiums higher for consumers.”