The price at the pump makes us physically ill. Every time we get the automated text message from our electric company, we open it with bated breath. In short, no part of being an adult is cheap. Right now, it feels like the only thing our bills are doing is climbing higher and higher, and now, right on cue, homeowners’ insurance rates are rising too.
According to a new report from LendingTree, regulator-approved home insurance rates have skyrocketed by 45.8% nationwide since 2020. To put that in perspective, that’s nearly twice the rate of inflation. Sweeeeeet.
Why Are Home Insurance Rates Going Up?
It’s a perfect storm of expensive nonsense. LendingTree experts and Reddit realists point to a few key culprits:
- Climate Chaos: An uptick in large-scale natural disasters means insurers are paying out more, and they’re passing those costs directly to you.
- The Price of Wood: The cost of building materials and labor has surged (thanks, tariffs and supply chain ghosts), making it way more expensive to rebuild a house than it was five years ago.
- The Medical Squeeze: Since home insurance often covers liability for injuries, our wonderful health care system is catapulting premiums up with it.
What Does the Impact Really Look Like?
One Redditor noted their premium went up 35% without a single claim. Another tracked their descent into madness with a 25% jump in 2023, followed by 35% in 2024, and another 30% this year.
“Everything is going up dramatically,” one commenter wrote. Our outrage echoes one of the replies: “Except our pay.”
The New Normal for Homeowners
If you have a mortgage, you can’t just quit insurance (the bank won’t let you), so people are getting creative — and a little desperate.
- The Deductible Gamble: To keep monthly payments down, some are opting for “catastrophic only” plans with deductibles of 2% to 5% of the home’s value. If your house is insured for $400,000, a 5% deductible means you’re on the hook for the first $20,000. As one user put it: “I’d rather fork over $25k to rebuild if it burns down than pay a fortune every month.”
- The “Broker” Shuffle: Experts suggest ditching the big-name loyalty and using an independent broker to shop around every single year.
- Coverage Cuts: Watch out for “silent” reductions. Some insurers are saving money by cutting out key coverages, which is all well and good until you actually need them.
Where Is Homeowners Insurance Rising the Most?
If you live in Colorado, Iowa, or Minnesota, our condolences. Those states saw the largest gaps between insurance hikes and inflation. Colorado, in particular, saw a staggering 74.4-percentage-point gap over the last five years.
Have you noticed a major jump in your homeowners insurance? Let us know in the comments.
More From Cheapism
- Insurance CEOs Made Millions While Homeowners Rates Soared 24% — Insurance is a polarizing business, and the CEOs are the ones raking in the money.
- New Data Shows Just How Hard It Is to Buy a Home Right Now — Buying a home is no longer an attainable thing, and the data only supports that.
- 15 HOA Red Flags That Could Cost You, Because Owning a Home Isn’t Expensive Enough — Owning a home is already expensive, but if you’re dealing with an HOA, you have a slew of added expenses.
