When Tom Bhramayana built his Louisiana home just five years ago, his annual premium was $1,575. Today it’s $5,000 and climbing, despite the fact the house is practically new. He has already switched insurers twice.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Stories like his are no longer rare. A new Bankrate study shows average premiums for a $300,000 policy run as high as $6,274 in Louisiana, while in Vermont the same coverage is just $834. The gap highlights how uneven and punishing the burden has become.
Insurers Drive Up Prices and Exit Entire Regions
Premiums rose more than 10 percent nationwide last year after an even steeper jump in 2023. Some states, like Nebraska, saw increases of more than 20 percent in a single year.
Moreover, the pressure is not just higher costs. In fact, major providers like State Farm and Allstate are retreating from high-risk areas altogether. That leaves fewer players in the market and even less competition to keep prices in check.
Climate Risks Push Rates Higher
Behind the numbers is an interesting trend. More frequent and costly disasters are changing how insurers price risk. Bankrate analyst Natalie Todoroff said, “Climate risk is the main thing that’s pushing home insurance costs higher and higher.”
The data backs that up is that global catastrophe losses hit $151 billion last year, with billions more already on the books in 2025 from fires in Los Angeles. For insurers, those payouts have to be recouped, and homeowners are the ones footing the bill.
Homeowners Forced into Tough Choices
The strain is hitting hardest in places where incomes lag behind the national average. In New Orleans, where household income is around $61,000, insurance premiums can top $10,000 a year before flood coverage is even added.
Faced with those numbers, some owners are being pushed to sell. Others are choosing to skip coverage entirely, rolling the dice in areas where a single storm could wipe out years of equity. Realtors across Oklahoma and Louisiana say more and more clients are asking whether they can go without.
Inflation Data Misses the Real Pain
The irony is that much of this pain barely shows up in official inflation measures. The Consumer Price Index only tracks renters’ insurance, while the PCE index reduces the weight of homeowner premiums by subtracting expected payouts.
That accounting quirk might make sense to statisticians, but it hides a real cost for households. Families are paying thousands more every year, and those dollars are not coming back.
What Lies Ahead
Analysts say the direction is clear. Rising home values, inflation in construction costs, and climate-driven disasters all point to more pain ahead. Todoroff summed it up: “It’s just becoming a less insurable or safe place to build nationwide.”
For homeowners, that means the financial squeeze is not letting up any time soon. Insurance is shifting from a given to a luxury, and millions of Americans are being forced to rethink what homeownership really costs.
Investors watching the fallout can also track real-estate ETFs on the TipRanks Stocks Comparison Tool. Click on the image below to explore the tool.
