According to a ValuePenguin survey of nearly 2,000 U.S. consumers, two in three home insurance policyholders said their rates rose in 2024.
The survey found that, in just a year, the rate of home insurance policyholders who worry their homes will become uninsurable nearly doubled, with 50% of policyholders fearing this will happen, up from 26% in 2024. Twenty-five percent of policyholders have received nonrenewal notices, a total that was up from 19% last year. The poll found that the average cost of homeowners insurance is $179 a month.
Sixty-seven percent of those polled said their home insurance rates rose in 2024, a total that was lower than the 72% who reported this last year. Among those with 2024 rate increases, 38% said theirs was 10% or higher. And of those surveyed, 75% said their home insurance rates will rise in 2025, with 44% stating their premiums are more difficult to afford now than in prior years. To cut costs, 34% of policyholders have downgraded or reduced their coverage.
Some question even carrying home insurance, with 24% of policyholders who feel home insurance is not worth the expense, and 31% have considered self-insuring.
“The homeowners insurance market is under duress, and it’s creating real challenges for many homeowners,” said ValuePenguin Home Insurance Expert Rob Bhatt. “Home insurance is becoming harder to find in many parts of the country, including California, Texas and Florida.”
Fears Mount Among the Insured
Half of home insurance policyholders worry that their homes won’t be insurable at some point. That’s nearly double the rate of last year’s survey, when 26% were worried. The top causes for concern are inflation (26%), the home insurance crisis (16%) and climate change (12%).
In a generational breakdown, 84% of Gen Zers (ages 18 to 28) with insurance policies were worried that their homes will become uninsurable, followed by 67% of millennials (ages 29 to 44); 38% of Gen Xers (ages 45 to 60); and 27% of baby boomers (ages 61 to 79).
As concerns grow, 62% feel federal intervention is necessary, up from 52% of those polled last year, with 79% of Gen Zers feeling that government intervention is imperative.
As concerns grow, 25% of policyholders have received nonrenewal notices, up from 19% last year. Interestingly, the likelihood increases as you get younger, even if those groups likely have had policies for shorter periods. Just 9% of baby boomer policyholders have received a nonrenewal notice from their insurer, compared to 17% of Gen Xers; 36% of millennials; and 56% of Gen Zers.
“Many companies have had to raise their rates to stay solvent,” Bhatt said. “In some cases, they’ve stopped accepting new customers or pulled out of certain areas because they’ve been spending more to settle claims than they’ve been earning in premiums.”
Two-thirds (67%) of home insurance policyholders say their rates increased in 2024, down from last year’s report, when 72% said their rates rose the prior year, and 35% of home insurance policyholders whose rates rose in 2024 say they did so by 5.0% to 9.9%. Regardless of whether they experienced rate hikes, policyholders are most likely to blame inflation for increases (63%), down from 72% last year.
Bhatt believes a combination of issues is driving rate increases.
“We’ve been in an all-of-the-above situation for the past few years,” Bhatt said. “Climate change has brought about an uptick in natural disasters, and inflation has driven up the cost of rebuilding homes. Insurance companies have to rebuild more homes, and each one costs more to rebuild.”
Click here for more on ValuePenguin’s study of home insurance rates.
