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

Aerial view of homes on green hillsides in Daly City, California.

Depopulation Patterns Get Weird

A recent ranking of “declining” cities heavily features some of the most expensive cities in the country — including New York City and a half-dozen in the San Francisco Bay Area.

April 10, 2024 - California Planning & Development Report

Close-up of maroon California 'Clean Air Vehicle' carpool lane access sticker on the back bumper of a silver Tesla vehicle.

California EV Owners To Lose Carpool Lane Privilege

A program that began in 1999 to encourage more electric car ownership is set to expire next year without Congressional and state action.

April 2, 2024 - San Francisco Chronicle

Aerial view of Oakland, California with bay in background

California Exodus: Population Drops Below 39 Million

Never mind the 40 million that demographers predicted the Golden State would reach by 2018. The state's population dipped below 39 million to 38.965 million last July, according to Census data released in March, the lowest since 2015.

April 11, 2024 - Los Angeles Times

Google street view of grassy lot next to brick church with elevated freeway on other side in Houston, Texas.

Houston Supportive Housing Development Sparks Debate

Critics say a proposed apartment building would negatively impact the neighborhood’s walkability.

2 hours ago - Houston Chronicle

Closed black wrought iron gate in front of gated residential community with large palm trees along sides of street.

Friday Funny: Gated Community Doubles Down

The Onion skewers suburbia.

3 hours ago - The Onion

Aerial view of Chicago with river in foreground.

‘Cut the Tape’ Report Takes Aim at Inefficiencies

A set of recommendations from the Chicago mayor’s office calls for streamlining city processes to stimulate more residential and commercial development.

4 hours ago - Block Club Chicago

News from HUD User

HUD's Office of Policy Development and Research

Call for Speakers

Mpact Transit + Community

New Updates on PD&R Edge

HUD's Office of Policy Development and Research

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.