Why Home Insurance Premiums Keep Going Up—and What You Can Do About It

Home insurance used to just be a formality that your lender required. Most buyers barely thought about it, more concerned with mortgage rates, list prices, and monthly payments. Coverage was easy to get, and the costs were relatively predictable.

But that’s no longer the case.

Premiums are rising rapidly across the country, and faster in some states than others. In 2024, homeowners in Colorado, Nebraska, Texas, and Florida paid the highest insurance premiums, according to a Realtor.com® analysis of data from the American Community Survey.

In some high-risk areas, rising rates are pushing owners to the brink, forcing them to move either to escape rising costs or before they end up upside down on their home value. By 2055, 84% of all census tracts are expected to experience some degree of value loss tied to climate-related pressures, totaling an estimated $1.47 trillion in devaluation, according to research from First Street.

That strain is turning insurance into a front-line filter for homebuyers. 

Nearly a third (30%) of buyers said they’ve changed where they’re looking to avoid high insurance costs, according to a September survey from Realtor.com. Another third (30%) have expanded their search boundaries in hopes of finding homes that are easier to insure. And almost 1 in 4 have reworked their entire homebuying strategy.

If you count yourself among the buyers overhauling their home search strategy because of insurance costs, it helps to understand what insurers are actually pricing—and which decisions can meaningfully lower your premiums. Here’s how to stay ahead of the costs, both before and after you buy.

What insurers are pricing is simpler than it sounds

Rising premiums aren't arbitrary, says Zach Patten, agency principal at Oak Grove Insurance.

“It all boils down to the home insurance carriers ensuring their balance sheets remain strong enough to pay claims,” he explains. 

And over the last five years, he says, the average cost of claims has climbed sharply, driven in large part by higher building material prices and construction labor costs. To stay solvent and able to pay future claims, carriers have responded by tightening underwriting and raising premiums.

In higher-risk markets, the impact is even more acute. In places exposed to hurricanes, floods, wildfires, or severe storms, insurers are also paying more for reinsurance—the coverage they buy to protect themselves from catastrophic losses—costs that ultimately flow down to homeowners.

When the cost of staying solvent outweighs the premiums insurers can reasonably charge, they pull out. That’s already happening in climate-embattled states like California and Florida, where major carriers have exited the market altogether, leaving homeowners with fewer options or no private coverage at all.

There’s little homeowners or buyers can do to fight these macro forces other than avoid these areas entirely. But risk isn’t priced at the state or neighborhood level alone. Insurers also look closely at signals specific to the home itself, especially what it would cost to rebuild it today.

“A common mistake buyers make is assuming the purchase price and the replacement cost are the same,” says Mario Serralta, a Florida-based attorney who handles coverage disputes. “Insurers care about what it would take to rebuild the home, not what you paid for it.”

That can lead to confusion for homeowners who may have bought an older house as-is and expected a cheaper insurance rate, as is common in car insurance. In many cases, though, these homes can actually be more expensive to insure because their outdated systems lead to higher replacement costs. 

How to run a quick cost check before you commit

So, are you buying a house that’s going to end up costing you too much to insure? The right time to price risk is before you make an offer or, at the latest, during the inspection period, when you still have leverage to renegotiate or walk away.

A quick check can flag whether a home is likely to come with a manageable premium or a costly surprise. The experts we spoke to recommend starting with these seven signals insurers care about most:

Roof age and material

If the roof is older than about 20 years or made with materials insurers consider higher risk, coverage options can narrow quickly, says Joshua Lavine, CEO of Capitol Benefits, an independent insurance agency. Ask the seller for the roof’s age, material, and permits. If it’s near the cutoff, expect higher premiums, limited coverage, or pressure to replace it as a condition of insurability.

Claims history on the property

Lavine also warns that prior insurance claims follow the house, not the owner. Ask the sellers whether the property has a claims history and investigate what those claims were for. Look closely for water or wind damage, which can push premiums higher or reduce the number of insurers willing to quote.

Replacement cost vs. purchase price

Insurers price policies based on what it would cost to rebuild the home today, not what you paid for it. Ask your agent for a replacement cost estimate early, and don’t assume a lower purchase price means a lower insurance bill.

Deductibles—especially in high‑risk areas

“Buyers should ask their insurance agent or provider about deductibles and claims handling,” says Patten. “The buyer should have a good understanding of what they will be responsible for paying out of pocket when a loss occurs, and how responsive their agent or provider will be when a loss occurs.”

Named storm deductibles, for example, can add 1% to 10% of the value of an insured home to an owner’s responsibility, according to the National Association of Insurance Commissioners. That means a homeowner of a median priced $420,000 home could be responsible for paying $42,000 (or 10%) out of pocket for damage from a named storm.

Flood coverage gaps

Standard homeowners insurance typically doesn't cover damage from flooding, and protection for damage from basement seepage, water backup, or ruptured service lines may require specific add‑ons.

In some areas, homeowners may also be required to purchase an additional policy from the National Flood Insurance Program. This policy helps ensure that homes in federally designated flood zones are covered for major flood events, but it doesn’t cover everything. 

NFIP policies typically exclude things like temporary housing costs and may cap payouts below your home’s full replacement value. If you’re in a high-risk area, you may also need private flood insurance as a supplement or alternative, though these policies are typically more expensive.

Age of major systems

Ask what’s been updated and when, advises Patten. 

“This includes the roof, the heating and/or cooling system, plumbing, and electrical. There may be fewer home insurance options for a home with older systems, even when those systems have been well-maintained,” he says.

Many insurers view outdated infrastructure as a sign of potential future claims and may either raise premiums, impose stricter policy terms, or decline coverage entirely. Even if everything is working, age alone can flag a property as high risk.

Fallback coverage options

If standard coverage isn’t available, you may be pushed into specialty, surplus, or FAIR plan policies. These options typically offer thinner protection, so it’s important to understand the trade-off before moving forward.

The long-term plan: Prioritize the upgrades that actually reduce premiums

Running the above checklist early gives you concrete negotiating power: Perhaps you can work with the seller to cover some upgrades in their concessions or knock a few thousand dollars off the purchase price so you can handle them when you move in.

But which upgrades and choices actually lower premiums over time, and which don’t move the needle at all?

If you're going to make only one upgrade, make it a new roof—particularly if you live in fire- or hail-prone areas. In these high-risk areas, a metal roof can save you up to 30% on your insurance costs by lowering the risk of damage from impact or fire.

Impact-rated windows, updated electrical systems, and documented mitigation measures can also lower or keep premiums steady, but you'll need to have proper documentation to reap the benefits.

As Serralta points out, many homeowners underestimate the value of having permits, inspection reports, or other forms ready to show an insurer. By proving that your mitigation efforts were done professionally, these documents can lower your quote, and even help you qualify for standard coverage in high-risk areas.

If you’re not in a position to renovate, you still have options. Some may opt for a higher deductible to reduce their premium, but Patten warns that this comes with risk. 

It’s essentially partial self-insurance, he says. You’re agreeing to pay more out of pocket in exchange for a lower annual rate, which may make sense for financially prepared buyers.

Rising insurance costs are real, but they can also be a useful framework for decision-making. Understanding what insurers reward gives you a clearer path forward whether you're looking to move, stay put, or simply understand your options.