Insurify, a digital insurance agent, has released its third annual American Homeowner Insurance report, offering a detailed forecast of home insurance trends across the US for 2025.
The report highlighted that states with high risks of storms and wildfires are expected to see the largest increases in premiums, with Louisiana projected to experience the most significant rise, with rates expected to climb by 27%. California follows closely behind, with an anticipated 21% increase in homeowner insurance costs.
Over the past two years, national average home insurance rates have risen by 20%. According to the report, this trend is expected to continue in 2025, with a further 8% increase, pushing the average annual cost of homeowners insurance to $3,520. This continued rise comes amid rising concerns over severe weather and natural disasters across the country, leading insurers to adjust rates to better manage the risks they face.
Even states with lower risks of severe weather or wildfires are not immune to rate increases. In Iowa, a 15% rise in premiums is projected, driven by escalating wind and hail events, which have become more frequent and damaging.
Similarly, Minnesota, which has experienced 18 billion-dollar disasters between 2022 and 2024, will also see a 15% increase in premiums. This reflects the broader trend of weather-related damage pushing rates up even in regions traditionally considered lower-risk areas.
"Severe weather risks are a key factor driving home insurance rate increases," said Hayden Broberg, vice president of commercial partnerships at Insurify. "In Iowa, for instance, hail events increased by 133% between 2022 and 2023. Combined with higher repair and material costs, insurers are struggling to absorb the growing risk, leading them to raise premiums."
States such as Hawaii, Iowa, and Minnesota will see a 15% rise in premiums, while Florida, which already holds the title of the most expensive state for home insurance, will see an additional 9% increase, pushing the average premium to $15,460 by the end of 2025, according to the report.
Meanwhile, the most expensive cities for home insurance are all concentrated in Florida and Louisiana, with Hialeah, Florida, topping the list. The report predicts that homeowners in Hialeah will pay an average of $26,693 for insurance by 2025, the highest in the nation.
The rising costs are largely attributed to the increasing frequency and severity of natural disasters, such as hurricanes, tornadoes, hailstorms, and wildfires, which have caused significant damage to homes and properties in recent years.
Insurify warned that homeowners in high-risk states may face continued rate hikes in the coming years, as insurers adjust their pricing models to reflect the growing risks associated with severe weather events.
