Where Homeowners Insurance Rates Are Rising the Fastest in 2023

Homeowners insurance provides financial protection to pay for losses or property damage if an unexpected, covered problem occurs involving your home or belongings. You agree to pay the insurance company a premium each year in exchange for this coverage, and your rates can fluctuate from year to year.

Homeowners insurance rates across the U.S. have been trending upward for more than five years — increasing by a cumulative 19.1% since 2018. The newest ValuePenguin study highlights how the home insurance landscape has changed since 2018, including a look at what changed in the first two-and-a-half months of 2023.

Key findings

Homeowners insurance rates up an average of 2.8% in 2023 across U.S.

Although plenty of time remains in 2023, homeowners insurance rates have continued their upward climb for the first few months of this year.

Between Jan. 1 and March 17, 2023, there's been an average increase of 2.8% in homeowners insurance rates across the 50 states and the District of Columbia. While this two-and-a-half-month sample only covers a small period, it provides valuable insight into insurance rate trends for the start of 2023.

Homeowners can expect to see their premiums increase by an average of 7.1% in 2023, according to S&P Global Market Intelligence.

Of course, homeowners insurance rates haven't increased in even measure throughout the country in early 2023. The top three states with the largest rate increases in the first two-and-a-half months of 2023 are:

Extreme weather and climate disasters could have affected those rate increases. New Mexico (three), South Dakota (three) and Arizona (two) each experienced weather or climate disaster events with damages or costs that exceeded $1 billion in 2022.

Meanwhile, one state has seen a decrease in homeowners insurance rates so far this year, while three didn't experience rate increases through mid-March:

How home insurance rates have increased or decreased so far in 2023

Homeowners insurance rates jumped in every state but 1 in 2022

So far, homeowners insurance rate increases in 2023 haven't reached 2022 levels — last year, homeowners across the country saw their premiums rise by 4.9%.

Numerous factors contributed to the higher insurance costs that occurred nationwide in 2022. Here are a few potential causes of rising rates:

Although 4.9% was the national average for rate increases last year, different states had different experiences in 2022. The three states that suffered the largest rate increases were:

North Carolina residents can blame a portion of the rate increases they saw in 2022 on a new policy that went into effect on June 1, 2022. The policy introduced a statewide premium increase of 7.9%, though the North Carolina Rate Bureau (an organization that represents insurance companies in the state) had initially requested average statewide rate increases of 24.5%.

On the other end of the spectrum, residents of one state saw no rise in their premiums, while three others underwent only slight rate increases:

How home insurance rates increased or remained the same in 2022

Rates have increased a cumulative 19.1% since 2018 across U.S.

From 2018 to 2023, the average cost of homeowners insurance has gone up by a cumulative 19.1% throughout the country.

Of course, the reasons behind insurance rate hikes are complex. To understand why homeowners insurance rates have increased so much in the past five or so years, it's helpful to look at the many factors that have contributed to these changes.

With extreme weather worsening, Sangameshwar says, premium increases will continue.

She also notes that some homeowners insurance providers have stopped doing business in states where the risk from extreme weather is extremely high, such as Florida or Louisiana. This leaves homeowners with fewer and more expensive insurance options.

States with the largest and smallest rate increases between 2018 and 2023

As noted on 2022 and 2023, rate changes don't occur evenly throughout the country. Here are the states that experienced the largest cumulative insurance rate increases between 2018 and 2023:

It's no surprise that Florida residents saw such large premium increases when you consider the number of weather-related disasters the state has experienced in recent years. Between 2018 and 2022, the Sunshine State was impacted by 19 billion-dollar weather and climate disasters.

South Dakota and Arizona have also seen numerous extreme weather events, and the increased homeowners insurance claims that accompany them. Between 2018 and 2022, South Dakota residents suffered through severe storms, droughts and flooding that resulted in eight billion-dollar weather and climate disasters in the state. Arizona experienced the same number of billion-dollar disasters during that period, though in the form of droughts, wildfires and flooding.

Meanwhile, some states saw very little in the way of insurance premium hikes, including the bottom three states below:

Alaska and Vermont combined to see just four billion-dollar disasters between 2018 and 2022.

How home insurance rates increased between 2018 and 2023

Natural catastrophes in 2022 in U.S. led to $98.9 billion in insured losses

In total, American homeowners saw 119 natural catastrophes in 2022. These disasters added up to $98.9 billion in losses for insurance providers and fell into the following five categories:

The loss figures above come from an Insurance Information Institute analysis of Aon data.

The part of the country you live in may impact the type of homeowners insurance you need. For example, additional coverage like earthquake or hurricane insurance might make more sense in certain areas than others.

3 ways to lower your home insurance costs

You can't control the premiums that insurance companies charge. Nonetheless, there are certain actions you can take that might help you save money on your home insurance costs.

1. Comparison shop

On a positive note, 76% of Americans who shopped around for better insurance rates saved money by doing so. Comparison websites like ValuePenguin and QuoteWizard can be great places to get benchmark quotes and research key details like the "]cheapest homeowners insurance companies and how much homeowners insurance you need.

2. Look for discounts

Many insurance providers sell multiple types of coverage. If you're willing to bundle your homeowners, auto, renters, life insurance and more, you might be able to score a discount. In fact, bundling home and auto insurance policies could save you up to 25%.

In addition to bundling, other discounts may exist as well. "You can also ask about loyalty discounts," says Sangameshwar, "as well as discounts if you improved your credit score or quit smoking."

3. Raise your deductible

Deductibles are what you have to pay out of pocket toward a loss before your insurance company kicks in to pay a claim. If you're willing to raise your deductible from $500 to $1,000, you could decrease the cost of your homeowners insurance by an average of 6%.

However, as Sangameshwar notes: "Raising your deductible is the riskiest way to save money. You need to make sure you can afford to pay for the raised deductible out of pocket in case of damages."