As home insurance costs surge across much of the United States, a handful of states are projected to be outliers this year, with rates holding steady or declining.
A new report from Insurify, an online insurance marketplace, projects that the average U.S. home insurance rate will climb 6% this year, reaching $2,522 annually. However, the study found that states less vulnerable to climate change-driven extreme weather events are largely spared from steep rate hikes, while regions facing increased climate risks bear the brunt of rising premiums.
According to the report, South Dakota is the sole state expected to see a decrease, with rates projected to drop 3% to $2,488 per year. Six other states — Alaska ($1,117), Missouri ($2,697), North Dakota ($2,517), Texas ($4,437), Washington ($1,432), and West Virginia ($1,398) — are forecast to have no increase at all in 2024.
That stability is the opposite of the situation in coastal and disaster-prone areas. Florida residents currently pay the highest rates nationwide, averaging $10,996 annually, with costs expected to rise another 7% next year. “Stabilization is important, but [premiums] have stabilized at high rates,” Florida state Rep. Anna Eskamani was quoted in the Missouri Independent. “Floridians can’t afford Florida anymore, and if we’re not taking climate change seriously, then we’re missing the point.”
Louisiana, a hurricane-prone state, faces an even steeper climb. A projected 23% increase will bring its average annual rate to $7,809.
The Insurify report, which analyzed home insurance costs across all 50 states, points to the growing impact of climate change and natural disasters on insurance markets. While some regions grapple with soaring premiums due to increased risk from hurricanes, wildfires, and flooding, others remain relatively unscathed.
Those soaring premiums are increasingly influencing homebuying decisions. Real estate professionals report that insurance costs are becoming a major consideration for some buyers, particularly younger generations entering the housing market, who show greater awareness of climate change impacts.
While 25% of all homeowners believe climate change has impacted their property’s worth, Millennials lead the pack, with 32% acknowledging climate change’s influence, followed by Gen Z at 29%.
As Gen Z and Millennials continue to enter the housing market, their heightened climate awareness could reshape real estate preferences. The report noted that areas with high climate resiliency may become increasingly desirable, potentially at the expense of regions more vulnerable to climate change impacts.
Experts caution that the current stability in some states may not last, though. As climate patterns shift, areas previously considered low-risk may face new challenges. The insurance market remains highly responsive to changing weather patterns and disaster frequencies.
