Homeowners Insurance Premiums Surge Nationwide: 2021-2025

Between 2021 and 2025, homeowners insurance premiums across the U.S. saw a significant rise of 64 percent, nearly quadrupling the rate of the previous five-year span, according to research by Newrez, a residential mortgage lender and servicer. The study, which examined about 1.2 million loans serviced by Newrez that originated in 2020 or later, reported that the average annual premium increased from $1,597 in 2021 to $2,625 by the end of 2025.

This trend is evident nationwide and is not isolated to states frequently experiencing severe weather events. The escalation in premiums is attributed to more frequent natural disasters, rising costs in repairs, materials, and labor, alongside other factors specific to different regions. This surge in insurance costs has impacted the affordability of homeownership, particularly for those purchasing their first home.

Significant premium increases were noted in several states, with Arizona experiencing a 94 percent rise between 2021 and 2025, the highest in the country. Idaho followed closely with an 88 percent increase, and Iowa and South Dakota each saw an 83 percent rise. Utah and Minnesota both experienced an 82 percent increase, while Washington reported 81 percent, and Louisiana and Colorado each had 80 percent spikes. Even in Alaska, where the increase was the smallest at 27 percent, homeowners still faced substantial cost hikes.

Despite considerable premium increases across Western and Central states, regions in the Midwest and the South maintained the highest premiums nationally. In Louisiana, homeowners paid an average of $4,238 annually, more than double the average in Delaware. Florida, even with recent regulatory changes aimed at resolving past crises, had the second-highest premiums at $4,060. Texas, affected by extreme weather and high construction costs, averaged $3,952 in premiums.

Experts anticipate that the rise in premiums will persist, with projections from Insurify, an online insurance comparison platform, suggesting a further 4 percent increase in 2026, bringing the average nationwide cost to approximately $3,057 annually. The increasing premiums contribute to higher monthly mortgage payments through escrow accounts, potentially pushing some prospective buyers out of homeownership and stressing existing homeowners.

Insurers, facing mounting risks, are responding by reducing coverage, not renewing policies, or restructuring them to transfer more risk to homeowners. In some cases, particularly where insurance is canceled, affected homeowners might rely on state-designated insurers of last resort, posing significant financial risks if a natural disaster occurs. Following the 2025 wildfires in California, it was revealed that many homeowners had recently had their policies canceled. In light of this, the Justice Department recently backed a legal case in California alleging that 16 insurers conspired to cancel fire coverage, pushing customers towards the California FAIR Plan, the state’s alternative insurance for fire risk.