Rising home insurance costs are adding pressure for buyers: Insurify

The dream of homeownership is becoming increasingly elusive for many Americans as both home prices and insurance premiums are on the rise. 

Over the past decade, home prices have nearly doubled, according to the S&P CoreLogic Case-Shiller national index. Homeowners insurance premiums are climbing too.

The average cost of insuring a $300,000 property surged by 12% in 2023, reaching $1,770 per year, according to a recent Insurify report. 

Another analysis by S&P Global revealed that homeowners insurance rates jumped by an average of 11.3% in 2023. Companies like Farmers Insurance Group of Cos. and Liberty Mutual Holding Co. Inc. saw particularly steep increases, with rates climbing by 19.4% and 17.2%, respectively.

In Texas, rates shot up by 23.3% last year, while Arizona and Utah weren’t far behind, with respective increases of 21.8% and 20.3%, according to S&P Global.

According to Insurify, Florida tops the list for the highest average annual home insurance cost at $9,213, while Vermont has the lowest average cost at $914, due to its limited risk exposure to natural disasters. 

The 10 least affordable states for home insurance, based on average annual premiums, include Florida, Oklahoma, Mississippi, Texas, Kansas, Georgia, Nebraska, Massachusetts, New York and Colorado. 

At the other end of the spectrum, New Hampshire, Minnesota, Vermont, Maine, Connecticut, Utah, Illinois, Washington, West Virginia and Ohio rank among the most affordable states for home insurance.

Homeowners can mitigate rising insurance costs by reinforcing roofs and installing storm shutters, among other measures. But homeowners are still likely to find fewer coverage options as insurers withdraw from high-risk areas. Acquiring a property in a low-risk area might be the safer solution, according to the Insurify report. 

To determine the affordability score of each state, Insurify identified the average yearly cost of a home insurance policy in 2023, how much home insurance prices changed since 2022, and how that change compared to the state’s wage growth.