Why Your Home Insurance Rates Went Up (And What To Do About It)

Got my home insurance renewal notice last month and genuinely thought it was a mistake. Premium went up 18%. Eighteen percent. Same house. Same coverage. No claims in years.

Called my insurance company. Rep basically shrugged through the phone. “Rates have gone up everywhere.”

Which. I know. I used to work in insurance. I understand rates go up. But 18% in one year felt personal.

So I started digging into what’s actually happening with homeowners coverage insurance and honestly it’s a mess out there. If your insurance got more expensive recently—and it almost certainly did—here’s why.

The numbers are genuinely alarming

Home insurance premiums have increased 20-30% over past few years depending on where you live. Some states worse. Florida, California, Louisiana—people seeing 40-50% increases or losing coverage entirely because insurers are pulling out.

National average is now over $2,000 a year. Up from around $1,400 just a few years ago. That’s not normal inflation. Something structural is happening.

Reason 1: Natural disasters are getting worse

This is the big one. Climate change making weather more extreme. Hurricanes stronger. Wildfires more frequent. Hailstorms causing more damage. Flooding hitting places that never flooded before.

2023 had 28 separate billion-dollar weather disasters according to NOAA. Most ever recorded. Insurance companies pay for a lot of that.

More claims = higher premiums. And they’re paying out way more. Affects everyone too, not just people in disaster areas. Insurance is shared risk pool. Claims spike in Florida, rates go up nationally.

Reason 2: Construction costs skyrocketed

When your house is damaged, insurance pays to repair it. Repairs have gotten stupid expensive.

Lumber prices spiked during pandemic and never fully came back. Labor costs up because not enough skilled contractors. Materials for everything—roofing, siding, windows—cost more. Supply chain issues made it worse.

Cost to rebuild a house up 30-50% in many areas over past few years. Insurance companies increase dwelling limits to keep up which means higher premiums. And when they pay claims they’re paying more per claim.

Reason 3: Your house is worth more on paper

Home values went crazy during pandemic housing boom. Great for net worth but also means dwelling coverage needs to increase.

Many insurers automatically adjust dwelling coverage based on reconstruction cost estimates. Even if you didn’t change anything, coverage went up, premium went up.

Reason 4: Insurance companies had terrible years

Insurance companies lost a lot of money in 2022 and 2023. Claims from natural disasters exceeded premiums by big margins. Historically bad underwriting results.

When insurers lose money they raise rates and get pickier about what they cover. We’re seeing both.

Reason 5: Reinsurance costs more

Insurance companies buy insurance for themselves. Called reinsurance. When massive disaster happens that would bankrupt regular insurer, reinsurance shares burden.

Reinsurance got way more expensive because reinsurers are paying out more. Your insurance company pays more for backup coverage, passes cost to you.

Reason 6: Inflation hit everything

Beyond construction, general inflation affects insurers. Employees want raises. Office buildings cost more. Administrative costs up. Investment returns volatile.

Everything getting more expensive at once.

Reason 7: Your specific situation changed

Sometimes increases are personal. Credit score dropped. Area rezoned as higher risk. Added pool or trampoline. Roof getting older. Filed a claim. Discount expired.

What you can do

Shop around. Biggest thing. Get quotes from 3-4 insurers. Same coverage can cost wildly different amounts. I’ve seen 40% variation for same house.

Raise deductible. Going from $1,000 to $2,500 can cut premium 15-25%. Only if you can afford it though.

Bundle. Home and auto together usually saves 10-25%.

Ask about discounts. Security systems. Fire alarms. New roof. Non-smoker. Claims-free. Age discounts. They don’t always tell you—you have to ask.

Improve home resilience. Impact-resistant roofing, hurricane shutters, wildfire landscaping can get discounts.

Review coverage. Paying for stuff you don’t need? But don’t underinsure to save money—that’s worse.

What not to do

Don’t drop insurance entirely. I know it’s expensive. But if house burns down you’re looking at hundreds of thousands in losses.

Don’t underinsure to save money. If you reduce dwelling coverage below what it costs to rebuild, you’ll be screwed on a major claim.

The uncomfortable reality

Some increases are probably here to stay. Climate change isn’t going away. Construction costs aren’t going back to 2019. Fundamental risks have increased.

Doesn’t mean accept whatever increase they send. Shop around. Negotiate. But budget for reality that insurance is more expensive now.

I switched insurers after my 18% increase. Found comparable coverage for 10% less than old company’s new rate. Still more than before but at least I didn’t just accept it.

Comprehensive is sitting on my laptop—she does this when she wants attention—and I should deal with that. But yeah. Home insurance expensive. Getting more expensive. Shop around, ask about discounts, don’t get caught underinsured.