A comprehensive analysis released by the National Association of Insurance Commissioners reveals significant strain in the homeowners insurance market. Premiums have increased substantially across all regions of the country over a seven-year period ending in 2024, with particularly steep increases in western states. The Northeast saw premiums rise 18% above inflation, the Midwest 25%, the Southeast 27%, and the West 43%. Regional average premiums ranged from $1,396 annually in the Northeast to $1,818 in the Southeast. Since the beginning of 2025, additional premium increases of 7% have occurred, placing further pressure on consumers already facing broader affordability challenges.
Insurers are actively shedding customers through nonrenewals at elevated rates. The rate of policies not renewed by insurance companies has increased substantially, ranging from 96% more nonrenewals in the Southeast to 216% more in the West compared to 2018 levels. This dynamic occurs when insurers determine that the financial risk associated with a policy exceeds potential profits. The combination of rising costs and declining availability is creating a challenging landscape for homeowners seeking adequate coverage.
Multiple factors are driving the cost increases. Climate change and the rising frequency of severe weather events have expanded financial risk for insurers, who are transferring these costs to consumers. Weather and climate disasters causing over $1 billion in damage increased more than fivefold between 2018 and 2022 compared to the 1980s. Additionally, inflation has raised home reconstruction and repair costs significantly, with replacement costs for property and casualty losses increasing 45% on average between 2020 and 2023.
The affordability crisis is creating ripple effects throughout the economy. Low-income households face disproportionate burdens and are more likely to forgo coverage entirely, leaving their primary asset vulnerable. Overall housing affordability has declined approximately 10% compared to scenarios where insurance costs had remained stable since the late 1990s. The NAIC report notes that while the homeowners insurance market remains operationally sound, it exhibits clear signs of stress, a conclusion supported by recent polling showing 42% of homeowners report significant recent cost increases.
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