Homeowners insurance costs have shot up 70% since 2021. Here’s why.

The cost of homeowners insurance is on the rise in the United States, driven by various factors such as climate change, increased cost of building materials, and surging home prices. According to a recent study by J.D. Power, almost half of property insurance policyholders in the U.S. have seen their premiums increase over the past year, marking the highest rate of increases in more than a decade.

Data from ICE Mortgage Technology shows that average homeowners insurance costs have risen nearly 70% over the past five years, with single-family homeowners with a mortgage now paying an average of $2,370 a year for their property policy. In 2025, California saw the sharpest increase in homeowners insurance costs, with premiums in Los Angeles rising by 19.5% compared to the previous year.

The rising costs of homeowners insurance are leading some Americans to consider switching insurers or even going without coverage, a risky decision that experts strongly advise against. Sean Kevelighan, CEO of the Insurance Information Institute, explains that insurance prices are increasing in areas where residents are more vulnerable to disasters like hurricanes and wildfires, which are exacerbated by climate change.

Factors contributing to the surge in property insurance costs include higher home values, climate-related risks, and the increased cost of building materials such as lumber and steel. With the median home sale price in the U.S. reaching a record high of nearly $400,000, the cost of insurance is reflecting the increased risk and potential claim payouts.

Despite the challenges, homeowners have options when it comes to choosing an insurer and can take steps to minimize their coverage costs. Making changes to landscaping to reduce flammable materials or investing in storm shutters and tie-downs in storm-vulnerable areas can help lower premiums. It’s important for homeowners to protect their investment by maintaining adequate insurance coverage, even as costs continue to rise.

In conclusion, as homeowners grapple with the rising costs of insurance, it’s crucial to stay informed about the factors driving these increases and to explore ways to mitigate the financial impact. By understanding the reasons behind the surge in premiums and taking proactive steps to reduce risk, homeowners can better navigate the changing landscape of property insurance.