10 States Where Insurance Costs Impact Housing Affordability

Insurance companies are responding to the increasing frequency and intensity of severe weather events caused by climate change by raising home insurance premiums in high-risk states, adding another hurdle to housing affordability in the U.S.

2 minute read

February 26, 2024, 12:00 PM PST

By Mary Hammon


Front view of stone home with severe tornado damage and portions of roof ripped off.

Laura Ballard / Adobe Stock

According to an article from Fox Business, skyrocketing insurance premiums are putting pressure on homeowners across the country. The average cost of home insurance on a $300,000 property in the U.S. has risen 12.7 percent to approximately $1,770 a year, but that rate is even higher in states at higher risk for severe weather and other climate-related hazards, says a new report by Insurify, an insurance comparison website headquartered in Massachusetts.

As frequency and severity of those events are only expected to increase, insurance companies are reconsidering their coverage in these areas. Some are opting to leave states like Florida altogether, driving costs in these states even higher. These rising costs represent an obstacle to home ownership and “has pushed a key tenet of the American dream out of reach for millions of families,” writes Fox Business’s Megan Henney.

Here are the 10 states with the highest average insurance premiums in 2023, according to the report:

  1. Florida: $9,213/year, 14% increase in 2023, +421% compared to national average (NA)
  2. Oklahoma: $4,782/year, 24% increase, +170% national average
  3. Mississippi: $4,017/year, 23% increase, +127% national average
  4. Texas: $3,969/year, 18% increase, +124% national average
  5. Nebraska: $3,519, 14% increase, +99% national average
  6. Colorado: $3,308, 12% increase, +87% national average
  7. Kansas: $3,245/year, 19% increase, +83% national average 
  8. New York: $1,942, 14% increase, +10% national average
  9. Georgia: $2,173, 17% increase, +23% national average
  10. Massachusetts: $1,649, 14% increase, -7% national average

Rising insurance costs are not only a challenge for existing homeowners, but combined with record-high housing prices and high interest rates, for potential home buyers as well. Even renters don’t escape unscathed, as landlords frequently pass along rising ownership costs in the form of rent increases to maintain profit margins.

Friday, February 23, 2024 in Fox Business

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