Homeowners insurance costs in the U.S. are about to jump again — and the next two years could hit buyers and owners harder than expected. New projections show that premiums may rise another 16%, driven by more natural disasters, higher rebuilding costs, and massive climate-risk exposure across the country.
Here’s what’s happening, in simple terms.
Insurance Premiums Are Set to Jump — Again
Real estate analytics firm Cotality says:
- 8% increase in 2026
- Another 8% in 2027
This follows several years of sharp, double-digit increases in some states — especially in coastal or high-risk markets.
Cotality’s chief data and analytics officer, John Rogers, says insurance costs are now rising “dramatically,” with no signs of slowing down. Insurance now makes up 9% of the average homeowner’s monthly payment — the highest share ever recorded.
Why Are Homeowners Insurance Costs Exploding?
Experts say it comes down to three major factors:
1. Rebuilding Has Become Extremely Expensive
Danielle Hale, chief economist at Realtor.com, says rebuilding costs are up because of inflation and supply-chain issues in the construction industry.
2. Natural Disasters Are Happening More Often
More storms, floods, wildfires, and wind damage = more insurance claims.
More claims = higher premiums.
Insurers are trying to get ahead of rising risks instead of reacting after the fact.
3. America’s Housing Stock Is More Exposed Than People Realize
Realtor.com research shows:
- 18% of U.S. homes have extreme wind risk
- 6% are at risk from wildfires
- 6% face severe flooding
Hale warns that trillions of dollars in real estate value sit in high-risk areas.
The Biggest Climate-Risk Hotspot: Florida
Coastal markets dominate the list of high-risk metro areas, but none top:
Miami–Fort Lauderdale–West Palm Beach
- $306.8 billion in home value at risk
- 23.2% of total market value exposed to extreme flood danger
Florida’s insurance market has already been battered — and rising premiums could worsen affordability even more.
What Rising Insurance Means for Buyers and Homeowners
The housing market is already cooling because of:
- High mortgage rates
- Rising home prices
- Lower affordability
Now, another surprise bill — a big jump in homeowners insurance — could:
- Push buyers out of the market
- Shock existing homeowners
- Slow sales in vulnerable regions
- Increase monthly payments even without rate hikes
Hannah Jones, senior economic research analyst at Realtor.com, says the trend could “discourage buyers” and weaken already fragile markets.
Bottom Line
Homeowners insurance hikes aren’t a small inconvenience — they’re becoming a major housing cost, and they directly impact affordability, mortgage planning, and long-term investment risk.
If you’re buying, selling, or investing, this is the moment to:
- Check climate-risk maps
- Ask insurers for quotes early
- Factor insurance into your mortgage calculations
- Be cautious in high-risk ZIP codes
- Understand that “cheap now” may be “expensive later”
The insurance wave is coming — and the smartest buyers will prepare before it hits.