Some states will see homeowners rate increases as high as 23% in 2024
The effects of climate change are putting some states that have historically had lower premiums in the line of fire for more frequent and severe weather events.
Between 2021 and 2023, home insurance premiums in the United States increased by 19% — from an average of $1,984 per year to $2,377 — largely driven by climate disasters and inflation, according to a new report on home insurance affordability from Insurify. While an intense hurricane season has the potential to cause premium increases next year, Insurify predicts Americans will see a more modest premium increase of 6% in 2024, putting the average annual homeowners insurance rate at $2,522 by the end of the year.
Some areas will experience much more dramatic increases, however. The report forecasts the states that will see the largest home insurance rate increases in 2024 are Louisiana (+23%), Maine (+19%), Michigan (+14%), Utah (+13%), Montana (+12%), South Carolina (+11%), North Carolina (+10%), Illinois (+10%), Connecticut (+9%) and Nevada (+9%).
Louisianans have dealt with high home insurance premiums for quite some time, thanks to the area’s vulnerability to extreme weather. However, the effects of climate change are putting some states that have historically had lower premiums in the line of fire for more frequent and severe weather events, which is pushing their premiums upward, as well.
One example of this expansion of catastrophe risk is Maine, which the Maine Climate Council predicts will see a 1.5-foot relative sea level rise by 2050. As the risk of coastal storm impacts increases in frequency 10 times with each foot of sea level rise, the state could see a very dramatic shift in both weather patterns and risk over the coming decades.
The states with the highest overall home insurance premiums are those that are prone to severe weather, including hurricanes, tornadoes and wildfires. According to the report, these states include:
- Florida: The average annual rate of $10,996 per year is projected to grow 7% to $11,759 in 2024.
- Louisiana: The average annual rate of $6,354 per year is projected to grow 23% to $7,809 in 2024.
- Oklahoma: The average annual rate of $5,444 per year is projected to grow 5% to $5,711 in 2024.
- Texas: The average annual rate of $4,456 per year is projected to decrease slightly to $4,437 in 2024.
- Mississippi: The average annual rate of $4,312 per year is projected to grow slightly to $4,482 in 2024.
- Colorado: The average annual rate of $4,072 per year is projected to grow 7% to $4,367 in 2024.
- Nebraska: The average annual rate of $3,962 per year is projected to grow 8% to $4,292 in 2024.
- Alabama: The average annual rate of $3,939 per year is projected to grow 9% to $4,281 in 2024.
- Kansas: The average annual rate of $3,437 per year is projected to grow 7% to $3,666 in 2024.
- Arkansas: The average annual rate of $3,368 per year is projected to grow 9% to $3,662 in 2024.
Despite the impact it has had on insurance rates, only 25% of those surveyed told Insurify they believe climate change has hurt their home value. Among those who have actually filed a homeowners claim, 40% believe climate change has affected their home value. Generational differences appear to affect this belief, as well, with Gen Z and millennials more than twice as likely to believe their home value has been affected by climate change compared to those in Gen X.