The home insurance affordability crisis: what the data show

The affordability crisis is two problems that overlap: a price that has risen faster than many household incomes, and, in the riskiest places, coverage that is harder to get at any price. The national average hides it. The Government Accountability Office found that the average U.S. premium rose only about 3% after inflation from 2019 to 2024, while rates in southern coastal areas at high wind risk rose 25% or more. Where the crisis is real, it is local, and it falls hardest on lower-income homeowners, retirees and anyone near the coast or the hail belt.

How much premiums have risen

Studies disagree on the size of the increase because they measure different things. The table sets the main ones side by side.

The gaps come from method. ICE tracks escrowed mortgages in nominal dollars, so inflation and larger coverage amounts are both in its figure. ICE said that in the latest year coverage limits, up 5.5%, accounted for roughly two-thirds of the increase and the cost per $1,000 of coverage rose 3%. GAO adjusts for inflation and holds coverage constant using rate filings. The truth for your household depends on where you live and whether your dwelling limit rose. why homeowners insurance keeps going up explains the causes.

Growth is slowing. ICE put annual growth at 8.7% in its September 2026 report, down from 15.1% at the end of 2024, and AM Best's average approved rate increase fell from 13.5% in 2024 to 4.3% in the first half of 2026 (Reinsurance News). A slower climb still starts from a higher base.

Who bears it

Place

The GAO found that state average premiums as a share of 2023 median household income were highest in Florida, Louisiana and Oklahoma. The Urban Institute's May 2026 report, built on about 18 million mortgages with insurance data from ICE, found borrowers in high-hazard census tracts carry insurance burdens nearly a full percentage point of income higher than borrowers in low-risk tracts, and that Gulf Coast and central plains metro areas rank highest (Urban Institute). Nearly one in four borrowers in high-risk tracts was cost burdened in 2024, versus one in eight in low-risk tracts. The rank order by dollars is in why home insurance costs the most in a handful of states.

Income and age

Urban measures burden as monthly insurance premiums over monthly income at loan origination, with 3% counted as burdened and 5% as severely burdened. By that yardstick, premiums rose from 1.87% of income on loans made in 2018 to 2.27% on loans made in 2024, and the share of new mortgages above 3% went from 10.5% to 16.2%. Income was the strongest predictor: by 2024 more than 40% of borrowers earning less than half of area median income were burdened.

Say a household earns $80,000 a year (a hypothetical). Three percent of that is $2,400 a year, or $200 a month. A premium above that line, in Urban's framework, is a burden by itself before the mortgage, taxes or repairs.

Harvard's Joint Center for Housing Studies reports that 20.7 million homeowners were cost burdened in 2024, meaning they spent more than 30% of income on housing, and attributes the rise largely to non-mortgage costs such as property taxes, energy and insurance. About 75% of homeowners earning under $30,000 were burdened, a record. Households headed by someone 65 or older had the highest burden rate by age, at 28%.

When price becomes availability

Price pressure shows up as lost coverage. The NAIC counted 2,019,799 company-initiated nonrenewals in 2024, and found the nonrenewal rate had risen by 96% to 216% across regions since 2018 (NAIC). A nonrenewal is a decision by the insurer not to offer another term, covered in nonrenewal vs cancellation of homeowners insurance: your rights.

People who lose a policy go to FAIR plans and other residual markets. Florida's Citizens held 1,407,805 policies at its September 30, 2023 peak and 254,736 on October 2, 2026, after large take-out programs moved policies back to private insurers (Citizens). The California FAIR Plan had 696,562 policies in June 2026 (FAIR Plan statistics). See Citizens Property Insurance in Florida: who qualifies and what to know and The California FAIR Plan explained.

Some go without. The Federal Reserve's survey of 2024 found 7% of homeowners had no homeowners insurance: 3% of those with a mortgage and 13% of those who owned free and clear. Among the uninsured, 43% said they could not afford it and another 19% said it was not worth the cost (Federal Reserve, May 2025). Lenders require coverage on a mortgaged home, which is why mortgage holders are rarely uninsured. going without homeowners insurance: the real risk covers the consequences.

How households adjust, and what it costs them

Three adjustments recur in the research and the market data.

• Higher deductibles. In Urban's mortgage data, the average deductible rose 48.6%, from $1,552 on loans originated in 2018 to $2,306 on loans originated in 2024, while the average annual premium rose 46.1%, from $1,270 to $1,856. S&P Global Market Intelligence says the slowdown in approved rates reflects "broad-based, non-rate actions" including higher deductibles, rate tiering by property age and condition and tighter risk selection (Insurance Journal, September 2026). A lower premium paid for with a larger deductible shifts risk to the homeowner, which matters most for the households least able to find $10,000 after a storm.
• Lower or different coverage. Trimming the dwelling limit lowers the premium and can leave a loss unpaid; cutting coverage to save money: the cuts that backfire shows which cuts hurt.
• Moving to a state plan or dropping insurance. The first usually means paying more for less coverage, the second means carrying the whole risk.

The monthly mortgage bill is where many people feel it. ICE says property insurance now accounts for 9.6% of the average monthly mortgage payment, and in New Orleans 24.3%. Escrow analyses can then lift the payment in a lump; escrow shortages after a premium increase explains how, and home insurance as a share of what you pay for housing looks at the whole housing budget.

What governments are doing

The policy options split into three types, and the evidence for each differs.

• Lower the losses. GAO surveyed stakeholders on federal options and found the strongest support for mitigation, such as tax deductions or credits for strengthening homes. State grants of up to $10,000 for roof and wind upgrades exist in Alabama, Louisiana and Oklahoma and, as a state share, in Florida's My Safe Florida Home program. See state home hardening grant programs and The FORTIFIED Home standard and insurance discounts.
• Change the rules for insurers. Florida's 2022 and 2023 legal reforms, summarized in florida's 2022–2023 property insurance reforms explained, targeted litigation cost. California's Sustainable Insurance Strategy lets insurers use catastrophe models and reinsurance costs in rates if they write in distressed areas (California's Sustainable Insurance Strategy).
• Share the risk. Residual markets and state backstops spread losses; federal reinsurance or direct insurance would extend that. GAO reported mixed views on direct federal insurance or reinsurance, with concerns about federal cost and effects on private markets. the federal role in home insurance covers the proposals.

The tension is that holding premiums down without reducing risk can push insurers out, and letting premiums rise fully can price out the households who are least able to move. Reasonable people and regulators disagree about where the balance sits.

If your premium is straining your budget

1. Check the dwelling limit before blaming the rate. If your limit rose with construction costs, part of the increase is coverage you wanted. The home insurance renewal increase checker separates the two.
2. Shop at renewal. Insurers are repricing at different speeds, so quotes for the same house can differ widely. shopping your policy at renewal: how often and how is the checklist.
3. Claim every mitigation credit and grant you qualify for, starting with roof, wind and wildfire credits (ways to lower your homeowners insurance without gutting coverage).
4. If you raise a deductible, set aside the money. A percentage wind or hail deductible is a cash requirement, not a saving.
5. Do not drop the policy. If you have a mortgage, the lender can buy more expensive coverage for you. If you do not, one uninsured loss can cost more than years of premiums.
6. If you are nonrenewed, act before the end date. your home insurance was nonrenewed: what to do now sets out the steps.

Key takeaways

• The national average premium has tracked inflation more closely than headlines suggest (GAO: +3% real, 2019 to 2024), but ICE shows the nominal monthly premium for mortgage holders up nearly 80% since 2020.
• Burden is concentrated by place and income: Florida, Louisiana and Oklahoma have the highest premium-to-income ratios (GAO), and Urban finds income is the strongest predictor of burden.
• Price turns into availability through nonrenewals, state plans and uninsurance; 7% of homeowners were uninsured in the Fed's 2024 survey, and 43% of them cited cost.
• Higher deductibles and tighter underwriting are absorbing part of the pressure, which lowers the premium while raising the homeowner's share of a loss.
• Policy responses fall into mitigation, rule changes and risk-sharing, each with trade-offs and none yet a settled answer.