Since 2021, home insurance rates have soared 46%, nearly three times the rate of inflation
Homeowners insurance premiums are expected to continue rising in 2026, though at a slower pace than the prior year, according to Insurify’s latest Insuring the American Homeowner Report. The Cambridge-based company projects the national average annual premium will increase 4% to $3,057 by year-end, marking a fifth consecutive year of increases.
That follows a 12% jump in 2025, when average costs reached $2,948, and reflects a broader trend in which rates have climbed 46% since 2021—adding roughly $900 annually for the typical homeowner. While the increase is expected to moderate nationally, several states are projected to see double-digit gains, led by California (+15.8%), followed by Nebraska (+13.2%), New Mexico (+10.8%); and Georgia (+10%).
“Home insurance costs have risen sharply nationwide since the pandemic,” said Matt Brannon, Insurify senior economic analyst and the author of the American Homeowner Report. “Even where we project rate growth to slow this year, homeowners are unlikely to see real relief. In Minnesota, we project a 4% rise in home insurance prices. But this will stack on top of the nearly $1,400 premium increase residents, on average, have faced over the last two years.”
Key findings from the study
- Rate increases continue, but the pace moderates: Home insurance premiums are projected to rise 4% in 2026, down from the 12% increase in 2025, while still extending a five-year upward trend.
- Multi-year cost escalation remains significant: Since 2021, premiums have increased 46%, adding approximately $900 annually for the average homeowner.
- Increases remain widespread across the U.S.: In 2025, premiums rose in 45 states and Washington, D.C., indicating broad-based market firming rather than isolated regional pressure. Geographic disparities are widening:
- Growing Affordability Gap Between States: The 25 most expensive states saw average increases of 14% in 2025, while the 25 least expensive states saw increases of 5%
- Certain states continue to experience outsized increases: Double-digit premium growth is expected in 2026 in states such as: California (+15.8%) Nebraska (+13.2%); New Mexico (+10.8%); and Georgia (+10%)
- Severe weather is a key cost driver: The Midwest and Great Plains states have experienced some of the largest increases, with multiple states seeing 35%+ cumulative premium growth since 2023, attributed in part to severe convective storms.
- High-cost states remain elevated: Florida continues as the most expensive market, with an average premium of $8,292 after an 18% increase in 2025.
- Outlook signals continued pressure, not relief: Even with slower growth in 2026, increases are expected to build on prior years’ gains, limiting any near-term relief for policyholders.
Economic impact on U.S. homeowners
Insurify says consumers are feeling the strain of escalating home insurance costs. One in four homeowners said they would drop coverage if they could. And nearly half of those surveyed said home insurance should be optional. Lenders generally require homeowners to carry insurance on mortgaged properties.
Insurify’s analysis found that eliminating homeowners insurance would save the average household $281 per month.
“Homeowners nationwide are looking for predictability, not surprises, when it comes to their insurance costs,” said Mallory Mooney, director of sales and service at Insurify. “Given rising rates, some homeowners and insurers are getting creative. We’re seeing more interest in premium-locking programs that guarantee consistent premiums over three years for a small fee. That type of stability is in high demand in an era when insurance premiums have risen 36% in the past three years.”
