Average premiums for homeowners insurance are set for another big increase in 2023, according to a new report.
Nationwide, the average cost of homeowners insurance is projected to jump 9%, or about $150, according to a recent report from online marketplace Insurify.
Homeowners in some states will see much higher premiums. In Florida, the most expensive state for home insurance, homeowners can expect to pay an average of nearly $8,000 in premiums in 2023 — up 66% from last year.
Inflation is partly to blame for the price hike, experts say, but climate change and rampant fraud are also behind big premium increases in certain areas, with home insurance costs in several states well above the national average.
What the research says
According to Insurify, a Massachusetts-based insurance marketplace, the average annual premium for homeowners insurance is projected to reach $1,784 in 2023, a 9% increase from 2022 when the average premium was $1,636.
- Expected growth in home insurance premiums in 2023 tops a 7% increase in 2022. According to Insurify, the average premium this year is expected to be $250 higher than in 2021.
- “The same inflationary pressures that are driving up your grocery bill are now driving up your homeowner’s insurance rates,” Colin Finn, managing director of Boston-based insurer Plymouth Rock, said in the report. “The more it costs and the longer it takes to repair your home, the higher the average cost per claim and ultimately the cost of homeowners insurance for everyone.”
- Inflation aside, experts say more catastrophic weather and natural disasters due to climate change are driving home insurance premiums higher as insurers face especially water- and fire-damage claims. (Note: Home insurance generally does not cover flooding.)
- Certain areas are more prone to severe weather, and FEMA assigns “risk ratings” based on the potential for natural disasters.
- On average, home insurance premiums for properties located in areas with extremely high risk ratings are $3,379, while premiums for homes in low-risk areas are $1,387, according to Insurify estimates.
Regardless of whether your home is located in a high-risk area, your home insurance premiums may be affected by natural disasters in other areas because insurers may operate across multiple states — hiking premiums in one area to offset costs in another.
States with the highest home insurance premiums
While the nationwide average premium is close to $1,800, many states exceed that amount. According to Insurify, the average home insurance premium in the 10 most expensive states is over $4,000.
10. Nebraska: $4,064
9. Texas: $4,067
8. Colorado: $4,177
7. South Dakota: $4,343
6. Kentucky: $4,370
5. Kansas: $5,005
4. Alabama: $5,102
3. Louisiana: $5,353
2. Oklahoma: $6,853
1. Florida: $7,788
In Florida, average home insurance premiums are estimated to be 437% higher than the 2023 national average of $1,784. According to Insurify, the Florida average was $4,692 last year. This year’s projection represents a whopping 66% cost increase for homeowners in the Sunshine State.
In addition to the billions of dollars in damage caused by recent hurricanes, Florida is grappling with a home insurance crisis caused by widespread “fraud and abuse of the legal system,” with the state responsible for 80% of the state’s home insurance lawsuits, according to the nonprofit Insurance Information Institute (III). Several insurers went bankrupt last year, III said, and dozens more either left Florida or stopped offering new policies in the state.
More than Rs
What does homeowners insurance usually cover?
Why you should consider flood insurance even if you don’t live in a flood zone
Home insurance rates are rising due to climate change: Here’s how to lower your costs