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Why homeowners insurance keeps going up
Higher rebuilding costs, costlier storms and a 2023 reinsurance spike pushed premiums up. Increases have slowed since, but the bill rarely falls back.
Premiums have climbed because the cost of paying claims climbed faster than the premiums collected. Rebuilding got more expensive, severe storms and wildfires produced larger insured losses, and the reinsurance that insurers buy to survive catastrophes reached record prices in 2023. After the industry lost money on homeowners that year, insurers filed large increases for 2024 and 2025. The pace has slowed since, but slower increases are still increases, and premiums almost never fall back to where they started.
Pressure 1: each claim costs more
Insurers pay to repair or rebuild, so construction prices flow straight into premiums. The Triple-I reported in December 2025 that structural replacement costs had risen nearly 30 percent over the previous five years, citing supply-chain problems and labor constraints, and said tariffs were expected to push claim payouts higher. See building materials, labor shortages and claim costs and inflation, rebuilding costs and underinsurance for the details.
The claim data agree. According to the Insurance Information Institute's tables of ISO data, average homeowners claim severity rose from $13,884 in 2019 to $20,062 in 2023, an increase of about 44% by our arithmetic. Non-catastrophe fire claims averaged $99,613 in 2020 and $173,111 in 2024 (III; the ISO tables exclude Alaska, Texas and Puerto Rico).
Pressure 2: catastrophe losses
Insured losses from natural catastrophes in the U.S. have run high for years. Aon put 2025 U.S. insured losses at $103.1 billion, of which severe convective storms (hail, straight-line wind and tornadoes) accounted for $52.3 billion and wildfire for $43.0 billion, according to III's compilation of Aon data. The January 2025 Los Angeles wildfires alone produced roughly $40 billion in insured losses by the estimates of Munich Re, Swiss Re and Gallagher Re. Much of the hail and wind damage never makes headlines because no single storm is large enough, but it adds up. severe convective storms and rising premiums covers that trend.
Pressure 3: reinsurance
Primary insurers buy reinsurance to cap their losses from a big hurricane or wildfire year, and its price flows into rates. The Guy Carpenter U.S. property catastrophe rate-on-line index rose 30.1% at the January 1, 2023 renewals, its steepest annual rise since 2006, according to Reinsurance News. Insurers did not absorb that. They filed for higher rates, particularly in states with heavy hurricane exposure. reinsurance costs and your premium explains the mechanics.
Pressure 4: the insurers were losing money
By 2023 the line was unprofitable. The industry's homeowners combined ratio was 110.9% that year, meaning insurers paid out and spent about $1.11 for every premium dollar earned (III table, NAIC data via S&P Global Market Intelligence). AM Best reported a $15.2 billion net underwriting loss, the worst this century (Reinsurance News). A combined ratio above 100 means an underwriting loss, and insurers cannot absorb that for long. The rate filings that followed are the main reason your bill jumped in 2024 and 2025.
Litigation added cost in some states, especially Florida, where AM Best credits the 2022 and 2023 tort reforms with improving results (Reinsurance News on AM Best, September 2026; see florida's 2022–2023 property insurance reforms explained).
How much have premiums actually risen?
Three federal and NAIC studies measure it differently, and the answers range widely.
| Source | Period | What it found |
|---|---|---|
| GAO-26-107867 (Feb. 2026) | 2019 to 2024 | Average U.S. premium rose 3 percent after inflation; rates in parts of some states, particularly southern coastal areas with high wind risk, rose 25 percent or more |
| Treasury Federal Insurance Office (Jan. 2025) | 2018 to 2022 | Average premium per policy rose 8.7 percent faster than inflation |
| NAIC market dynamics report (Aug. 2026) | 2018 to 2024 | Inflation-adjusted average premium per policy up 18.3% to 43.3% across NAIC regions |
These studies use different data, years and methods, so treat them as a range rather than one number. What they share is the pattern: the national average moved less than the extremes, and the extremes landed in coastal and storm-prone areas.
Why increases lag and land unevenly
An insurer cannot raise rates the day its costs rise. It files with the state, and approval takes time. GAO found that median approval times for 2020 to 2024 were longest in Colorado and California, with Colorado's at 331 days. Increases then reach policyholders at renewal, one policy term at a time. how insurers file rate increases with regulators describes the process.
Your own premium can also rise without a rate filing. If your dwelling limit moves up with construction costs, which an inflation guard provision does automatically, the base your rate applies to grows. A lost discount, a new surcharge or an aging roof can add more.
What is easing
Several measures have turned. Per AM Best's September 2026 report, the average approved rate increase fell from 13.5% in 2024 to 7.6% in 2025 and 4.3% in the first half of 2026. The industry posted a $16.5 billion net underwriting gain in 2025, and the first-half 2026 direct incurred loss ratio was 48.4%, the lowest midyear mark in five years. Triple-I/Milliman put the 2025 net combined ratio at 88.1. Reinsurance pricing has dropped too: the Guy Carpenter index was down 16% year to date by mid-2026, and Florida insurers reported cuts of roughly 15% to 25% at their June 2026 renewals.
Some of that is reaching consumers. The Texas Department of Insurance reported that insurers filed an average homeowners rate decrease of 4.3% in the period since July 2026 (Insurance Journal, October 9, 2026). That is one state and one set of filings, and a filed decrease applies at renewal, so check what your own renewal says.
Easing also has limits. Reinsurance costs fell, but construction costs are still high, and a single major hurricane or wildfire season can reverse a year of improvement. The good year of 2025 had no hurricane landfalls in the U.S., which no one can count on repeating.
What this means for your policy
- Expect smaller increases than 2024, not decreases. Several insurers are moving toward flat or lower rates in some states; others are still filing increases where losses remain high.
- Check the dwelling limit. If the limit rose, part of the increase is coverage that tracks the true cost of rebuilding. The home replacement cost estimator helps check it.
- Shop at renewal. Insurers are not repricing at the same pace, so quotes now vary more. Texas's commissioner made the same point when announcing the filings.
- Ask what changed. If the jump is large, your home insurance premium jumped: what to do shows the steps.
Key takeaways
- Premiums rose because claim costs, catastrophe losses and reinsurance prices all rose, and 2023 underwriting losses forced large rate filings.
- Studies measure the increase differently, from 3 percent after inflation (GAO, 2019 to 2024) to 18.3% to 43.3% (NAIC regions, 2018 to 2024); coastal and storm-prone areas rose the most.
- The average approved rate increase fell from 13.5% in 2024 to 4.3% in the first half of 2026, and some Texas filings are decreases.
- Rate changes arrive at renewal and lag the cost trend, so your own premium can still rise even as the national picture improves.
- A dwelling limit that keeps pace with rebuilding costs raises your premium by design; check it, then shop.