New Insurify Report Predicts 8% Rise in Rates With Average Homeowner Spending $261 More On Home Insurance in 2025
Homeowners across the United States are bracing for increased insurance premiums in 2025, driven by a combination of escalating natural disasters, inflation, and rising construction costs. According to Insurify’s latest report, the national average cost of homeowners insurance is projected to rise by 8%, reaching $3,520 annually by the end of the year.
“Severe weather risks are a top driver of home insurance rate increases,” said Hayden Broberg, Vice President of Commercial Partnerships at Insurify. “Between 2022 and 2023, the number of hail events in Iowa has soared 133%. Add higher repair and materials costs into the mix, and you have an environment in which insurers can no longer afford to carry as much risk as they once did.”
This is the third annual American Homeowner Insurance report produced by the online digital insurance agency, which examines probable home insurance rate movements in every states, allowing it to identify in which states will homeowners’ insurance rates rise the most rapidly during the year.
Key findings from this year’s report
To project homeowners insurance trends across the country, Insurify’s data scientists turned to their real-time database of insurance quotes from partner carriers, as well as aggregated rate filings from Quadrant Information Services.
The report’s key projections include:
- The national average cost of homeowners insurance will rise 8% to $3,520 per year by the end of 2025.
- Louisiana and California will see the sharpest increases, at 27% and 21%, respectively.
- Home insurance rates will climb by 15% or more in Hawaii, Iowa, and Minnesota.
- With a 9% increase on the horizon, Florida will continue to be the most expensive state for homeowners insurance, averaging $15,460 by the end of 2025.
- The most expensive cities for home insurance are all clustered in Florida and Louisiana, with Hialeah, Florida, topping the list at a projected 2025 average of $26,693.
- Increasingly severe and frequent natural disasters, like hurricanes, tornadoes, hailstorms, and wildfires, are driving nationwide home insurance increases.
- Sustained tariffs on homebuilding materials would likely promote further home insurance rate increases.
Most Expensive states for home insurance this year
Climate-Related Disasters Drive Premium Increases
States with high exposure to natural disasters are expected to see the most significant hikes. Louisiana tops the list with a projected 27% increase, followed by California at 21%. Even traditionally “safer” states like Iowa and Minnesota are not immune; both are anticipated to experience 15% increases due to a surge in severe weather events.
“Severe weather risks are a top driver of home insurance rate increases,” said Hayden Broberg, Vice President of Commercial Partnerships at Insurify. “Between 2022 and 2023, the number of hail events in Iowa has soared 133%.”
Economic Factors Compound the Issue
Beyond climate concerns, economic factors are also contributing to rising premiums. Inflation has led to higher costs for building materials and labor, making home repairs and rebuilds more expensive. Additionally, sustained tariffs on homebuilding materials are expected to further drive up insurance rates.
Massachusetts: Moderate Increases Amid National Trends
In Massachusetts, homeowners are experiencing more moderate increases compared to the national average. In 2024, the average annual premium in the state was approximately $2,382, while the Projected Annual Premium for 2025 is $2432. As a result, the projected increase is a 2% or roughly $51 cost increase, which, while above the national average of $1,754, reflects a less severe hike.
Factors contributing to Massachusetts’ insurance rates include exposure to severe weather events and high property values. The average premium for a home with $300,000 in dwelling coverage is around $2,302.
New England: Regional Variations Reflect Local Risks
Across the rest of New England, homeowners are experiencing varying impacts on insurance premiums:
- Connecticut: Projected to see a 5% increase in 2025, with average premiums rising from $2,600 to approximately $2,724.
- Rhode Island: Anticipated to experience a 4% increase or a projected cost increase of $118, with premiums moving from $2,779 to about $2,897.
- New Hampshire: Expected to have a 3% rise or a projected cost increase of $52, with premiums increasing from $1,556 to around $1,608.
- Vermont: Projected to see a 3% uptick or a projected cost increase of $39, with premiums going from $1,208 to approximately $1,248.
- Maine: Anticipated to experience a 3% increase or a projected cost increase of $47, with premiums rising from $1,641 to about $1,688
These variations reflect local risk assessments, historical weather patterns, and state-specific regulatory environments.
Strategies for Homeowners
Homeowners are advised to review their insurance policies and consider strategies to mitigate rising costs. Options include opting for higher deductibles, customizing policies to fit specific needs, and consulting with insurance experts to identify potential savings.
As the landscape of homeowners insurance continues to evolve, staying informed and proactive is key to managing the financial impact of these changes.
