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- Increases in homeowner’s insurance are a national trend, not just isolated to a few states.
- Natural disasters like hail in the Midwest and tornadoes in the South are putting a strain on insurers.
- Louisiana and California are expected to see average increases of over 20%.
Home insurance rates are expected to rise across the country by the end of the year, according to a new study released by the digital insurance platform Insurify.
The annual cost of homeowner’s insurance is projected to increase 8%, to a national average of $3,520.
However, some states like Louisiana, Iowa, and Hawaii are expected to see increases greater than 17%.
“This is a group of states that insurers are catching up to the perceived risk that has accumulated,” Insurify data expert Matt Brannon told Business Insider.
Insurance companies have incurred massive losses in recent years, as natural disasters have increased in frequency and severity, Brannon explained.
In 2024, there were 27 billion-dollar disasters in the US, which is topped only by a record-breaking 28 disasters in 2023.
Hurricanes, wildfires, and tornadoes are common culprits but there are other growing threats, like hail.
“Insurance commissioners in multiple states in the Midwest are saying that hail is becoming an increasing problem for home insurers,” Brannon said. “Hail can inflict a lot of damage on roofs, and we know that roofs are very expensive to get replaced.”
Below are the nine states where homeowner’s insurance rates are expected to rise the most by the end of the year.
9. Colorado
Hail is an increasing concern in Colorado and is a primary reason for recent premium hikes in the state.
Denver roofer Said Ahmad told BI this year that the storms—and the damage they cause—have gotten significantly worse over his 18-year career.
“When I first got into the business, if you had a $10,000 claim, that was considered big. Now, all of them are almost at least that,” Ahmad said.
Projected increase in 2025: 11%
Average annual premium in 2024: $6,630
Projected annual premium for 2025: $5,984
8. Oregon
Though California, its neighbor to the south, may be better known for its wildfire risk, significant disasters have also struck Oregon. Last year, a record-breaking 1.9 million acres burned in the state, destroying 40 homes and 132 other structures, state officials said.
Projected increase in 2025: 12%
Average annual premium in 2024: $1,617
Projected annual premium for 2025: $1,807
7. South Dakota
Like other Midwestern states, hail is a significant risk for South Dakota homes. The world-record for the largest hailstone was in Vivian, South Dakota, a small town, where an 8-inch diameter hailstone was recorded in 2010.
Projected increase in 2025: 13%
Average annual premium in 2024: $3,596
Projected annual premium for 2025: $4,061
6. Arkansas
Some research shows that the traditional Tornado Alley, including parts of Texas, Oklahoma, and Kansas, is shifting eastward into states like Arkansas. In May 2024, Arkansas experienced a state record of 17 tornadoes in one day, according to the National Weather Service.
The state is also considered at high risk for ice storms, the Insurify report noted.
Projected increase in 2025: 13%
Average annual premium in 2024: $4,490
Projected annual premium for 2025: $5,077
5. Minnesota
Worsening hail storms in Minnesota are directly tied to increasing insurance rates.
“We’re having bigger storms. We’re having these hailstorms that just cause a lot of claims damage,” Minnesota insurance official Grace Arnold told local news outlet NBC 11.
In August 2024, a 6-inch diameter hailstone found in Chokio, Minnesota tied the state record.
Projected increase in 2025: 15%
Average annual premium in 2024: $3,524
Projected annual premium for 2025: $4,058
4. Hawaii
“Hawaii’s increase is mainly driven by the 2023 Maui fires,” Brannon said. The deadly fires claimed over 111 lives and were partially driven by a sudden, intense drought on the island.
The estimated cost of recovery is expected to exceed $12 billion, the local newspaper, the Honolulu Star-Advertiser, reported.
Projected increase in 2025: 17%
Average annual premium in 2024: $1,548
Projected annual premium for 2025: $1,808
3. Iowa
Iowa has seen an 80% increase in major hail events between 2022 and 2024, according to Insurify.
In 2021, a hail storm in Larchwood, Iowa, located about 4 hours north of Des Moines, caused damages around $20,000 in claims for many homes, according to local newspaper The Des Moines Register.
Projected increase in 2025: 19%
Average annual premium in 2024: $3,201
Projected annual premium for 2025: $3,825
2. California
The impacts of the Los Angeles fires this past January, estimated to cost at least $250 billion in damages, are already being felt. Insurance company State Farm has asked California officials for emergency permission to raise rates by an average of 22%.
“Insurance will cost more for customers in California going forward because the risk is greater in California,” State Farm said in a letter.
Projected increase in 2025: 21%
Average annual premium in 2024: $2,424
Projected annual premium for 2025: $2,930
1. Louisiana
Hurricanes are the major risk factor for Louisiana and four cities in the state rank in the top 10 most expensive cities for homeowner’s insurance, according to Insurify.
Marrero, Thibodaux, New Orleans, and Kenner are all expected to see average premiums totaling more than $17,000 by the end of the year.
Projected increase in 2025: 27%
Average annual premium in 2024: $10,964
Projected annual premium for 2025: $13,937
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