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American homeowners are facing a rapidly growing financial burden as home insurance premiums continue their steep upward trajectory, with national rates rising nearly 47% between 2020 and 2025, according to a new LendingTree analysis.
The report paints a picture of an insurance market reshaped by increasingly costly natural disasters, rising construction expenses, and persistent inflationary pressures. While premium growth slowed somewhat in 2025, homeowners across the country continue to contend with significantly higher coverage costs than they faced just a few years ago.
Nationwide, home insurance rates increased by a cumulative 46.8% over the five-year period. The acceleration became particularly pronounced after 2021, with annual increases reaching 10.9% in 2023 and peaking at 12.7% in 2024 before moderating to 6.0% in 2025.
Industry experts attribute the trend largely to a growing number of severe weather events and the rising cost of rebuilding damaged properties. According to the report, the United States experienced an average of roughly 23 weather-related disasters causing at least $1 billion in damage annually between 2020 and 2024, compared with an average of 15 such events during the previous five-year period. At the same time, supply chain disruptions and labor shortages significantly increased the cost of materials and repairs, making insurance claims more expensive for carriers.
The impact has varied considerably by region. Colorado recorded the largest cumulative increase in home insurance premiums, with rates more than doubling—rising 100.8% between 2020 and 2025. Iowa followed with a 96.0% increase, while Minnesota ranked third at 88.2%. Analysts cited elevated exposure to wildfires, hailstorms, severe winds, and other weather-related hazards as major contributors to these sharp increases.
By contrast, West Virginia experienced the smallest rise during the five-year period at 19.2%, followed closely by Vermont and Maine. These states generally face fewer large-scale weather and property-loss risks, helping insurers maintain more stable pricing.
The study also found substantial differences in the cost of coverage across the country. The average annual homeowners insurance premium now stands at $2,395 nationwide. Oklahoma ranks as the most expensive state, where homeowners pay an average of $5,298 per year, followed by Nebraska at $4,956 and Colorado at $4,310. Hawaii remains the least expensive state, with average annual premiums of $801.
Affordability concerns are becoming increasingly evident. Rising premiums have prompted some homeowners to increase deductibles, consider changing insurers, or even contemplate dropping coverage altogether. LendingTree cited separate research indicating that more than 12 million U.S. homes were uninsured in 2024, representing roughly 14% of owner-occupied properties nationwide.
Despite expectations that insurance costs will remain elevated, analysts believe the pace of future increases may be less severe than the sharp spikes recorded in recent years, provided major catastrophe losses remain relatively contained.
The report underscores a broader challenge facing the housing market: as climate-related risks intensify and rebuilding costs remain high, insurance affordability is becoming an increasingly important factor in household financial planning.
Source: LendingTree, LLC.
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