According to the latest report released by the financial data company Intercontinental Exchange (ICE), the cost of homeowners insurance in the United States continued to rise rapidly in 2024. Many homeowners are even choosing to forgo purchasing homeowners insurance, risking the possibility of losing everything.
Data shows that the average annual premium for homeowners insurance in the United States increased by a record $276 in 2024, reaching $2290, a 14% year-on-year increase. Since 2019, the cost of homeowners insurance has surged by 61%.
While insurance premiums are rising across the United States, the increases are particularly noticeable in certain regions. For example, insurance costs in Seattle, Salt Lake City, and Los Angeles rose by over 20% last year, while the annual average premiums for homes in Miami, New Orleans, Dallas, and Tampa have exceeded $3500.
The significant increase in homeowners insurance costs is mainly due to frequent natural disasters and rising repair costs. For example, recent hurricanes such as “Milton” and “Helen” in Florida caused $115 billion in damages, and the losses from wildfires around Los Angeles in California reached $500 billion. The costs of materials and labor required for home repairs are covered by insurance companies.
Since the pandemic, the prices of building materials have risen by about 40%, far exceeding the inflation rate. Insurance companies have had to offset these expenses by raising premiums in other areas through a practice known as “cross-subsidization,” leading to a chain reaction of rising homeowners insurance premiums across the country.
ICE data shows that Miami has the highest average annual homeowners insurance premium at $6225, which has increased by 65.6% over the past five years. New Orleans follows at $5721, showing an 85.1% increase over the same period, while Dallas and Tampa are at $3659 and $3602 respectively, with notable increases. Other cities such as Houston, Denver, and Orlando also rank high, with five-year increases all exceeding 60%.
In response to the continuously rising insurance premiums, homeowners are adopting strategies such as changing coverage options and increasing deductibles. In 2024, 11.4% of homeowners changed their insurance policies, a higher proportion compared to 9.4% in 2023 and well above the usual 8% in previous years.
Additionally, approximately 6 million American homeowners have chosen to forego purchasing insurance, many of whom are from low-income groups. According to a report by Mortgagetech, Sharon Conilisen, the housing affairs director of the American Consumer Federation, points out that this decision exposes them to the significant risk of losing everything.
She suggests that safer strategies include upgrading home disaster prevention equipment, bundling insurance with auto coverage to lower premiums, or adjusting coverage amounts based on rebuilding costs rather than property valuations. Homeowners should weigh the risks and insurance costs based on local conditions and adopt flexible strategies to cope.
(This article is for general information reference only and has no specific recommendations. Epoch Times does not provide investment, tax, legal, financial planning, real estate planning, or other personal financial advice. For specific investment matters, consult your financial advisor. Epoch Times assumes no investment responsibility.)