Why have homeowners insurance premiums increased so much recently?

Premiums have surged due to factors like more expensive climate-related disasters, rising construction costs, population shifts into vulnerable areas, and escalating legal expenses passed on to homeowners.

What role does climate change play in rising insurance costs?

Climate change contributes to increasingly severe and expensive natural disasters, leading to higher insured losses and consequently driving up insurance premiums for homeowners.

What are some potential solutions to control rising insurance premiums?

Solutions include prioritizing building resilience through grants and tax breaks, restoring federal disaster mitigation programs, and implementing legal reforms to curb excessive litigation costs.

Home / Business and Economy / Insurance Costs Skyrocket, Homeowners Squeezed

Insurance Costs Skyrocket, Homeowners Squeezed

30 Jan

•

Summary

Homeowners insurance premiums surged nearly 25% in real terms since 2019.
Climate change, construction costs, and population shifts drive disaster losses.
Legal costs are a major factor, with some states seeing reform impact premiums.

Insurance Costs Skyrocket, Homeowners Squeezed

Homeowners insurance premiums have risen significantly, with a nearly 25% increase in real terms between 2019 and 2024. This surge is contributing to a downturn in the condo market and increasing rents, impacting housing affordability nationwide.

The escalating costs are attributed to several factors beyond simple insurer greed. Increasingly expensive natural disasters, amplified by climate change and growing development in vulnerable areas, resulted in $108 billion in insured losses in 2025. Furthermore, policymakers have been slow to invest in disaster preparedness and mitigation measures.

Escalating legal expenses, including large jury awards and plaintiff-friendly laws, are a primary driver of premium hikes. Some states are exploring reforms; Florida, for instance, enacted changes limiting litigation, which led to new insurers entering the market and reduced premiums.