The average annual homeowners insurance premium is projected to climb another 4 percent this year, reaching $3,057 by the end of 2026, according to a nationwide rate analysis from online insurance marketplace Insurify. The projection extends a run that has pushed the typical premium up 46 percent since 2021 — about three times the pace of inflation — as insurers absorb losses from convective storms, hurricanes and wildfires. The flat national figure, though, hides a sharp split: while regulators in Florida just approved the state’s first homeowners rate cut in years, insurers in California, Nebraska and New Mexico are pushing double-digit increases to cover mounting disaster claims.
A National Average That Hides a Widening State Divide
Forty-five states and the District of Columbia are projected to see homeowners rates rise again in 2026, but the size of the increase varies enormously by geography. Insurify’s projections show California facing the steepest climb, up 16 percent to $2,843, as insurers try to recover losses from the Palisades and Eaton fires that tore through Los Angeles County in January 2025 — together the most expensive non-hurricane disaster on record in the United States. Nebraska (13 percent), New Mexico (11 percent) and Georgia (10 percent) round out the states with the largest projected jumps, each tied to a specific peril: hail and tornado damage in Nebraska, wildfire exposure in New Mexico, and severe convective storms in Georgia.
The pattern already showed up in 2025 data. Minnesota’s average premium jumped 34 percent last year, the largest one-year increase of any state, after insurers there paid out $158 in claims for every $100 collected in premiums during 2022 — a stretch that included more than $6 billion in hail and wind damage. Colorado (33 percent), Iowa (28 percent), Nebraska (25 percent), Oklahoma (24 percent) and South Carolina (20 percent) also posted increases of at least one-fifth in a single year, driven overwhelmingly by convective storm losses rather than hurricanes. At the other end, five states — Hawaii, Massachusetts, Maine, Louisiana and Rhode Island — are projected to hold flat or dip by as much as 2 percent in 2026.
Nationally, insurers raised average premiums 12 percent in 2025, and the gap between costly and affordable markets widened as they did it. Premiums rose nearly three times faster last year in the 25 most expensive states for coverage than in the 25 cheapest, a 14 percent increase compared with 5 percent. That divergence means homeowners in already-expensive markets are absorbing a disproportionate share of the national premium growth, even before the separate deductibles and coverage changes taking effect this year are factored in.
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How Insurers Are Shifting Risk Onto Homeowners
Part of the increase is coming from how policies are being rewritten, not just how much they cost. In hurricane-prone states, insurers are increasingly applying a separate hurricane deductible equal to 5 percent of a home’s dwelling coverage, a provision that can leave a homeowner covering $10,000 or more out of pocket before a claim pays out. In regions with frequent hailstorms, insurers are also shifting away from covering roofs at full replacement value and instead insuring them at actual cash value, a method that factors in depreciation and results in substantially smaller payouts for older roofs.
Rebuilding costs are compounding the pressure. The price of building materials rose 15 percent over the past year, more than double the 7 percent increase recorded over the previous two years combined, pushing up the dwelling-replacement values that premiums are calculated against. Insurify said it updated its pricing methodology in 2026 specifically to reflect these higher dwelling coverage values and the spread of peril-specific deductibles, a change that helps explain why some states’ projected increases outpace the underlying claims trend in their region. Convective storms — the hail, wind and tornado events concentrated in the Midwest and Great Plains — narrowly overtook hurricanes in 2025 as the costliest driver of insurer losses worldwide since 2000.
Florida’s Rate Cut Complicates the National Story
Florida offers the clearest counterexample to the national trend. Citizens Property Insurance Corporation won approval for an average 8.8 percent rate cut on homeowners multiperil policies and a 5.5 percent cut on wind-only policies from Florida’s Office of Insurance Regulation in March, effective July 1 for new business and applied to existing policies at renewal. The state-created insurer of last resort has also seen its policy count fall 76 percent, from a peak of 1.41 million in October 2023 to 336,000, as legislative reforms aimed at curbing litigation pushed private insurers back into the market.
Even with that relief, Florida is still projected to remain the nation’s most expensive state for homeowners coverage, with the average annual premium reaching $8,458 by the end of 2026 — more than 2.7 times the national figure. That premium reflects a state exposed to hurricanes, which account for nine of the ten costliest natural disasters on record in the United States. The Florida experience suggests regulatory and legal changes can slow, but not reverse, the underlying cost trend in disaster-prone states, since the risk that drove rates up in the first place has not diminished.
Louisiana followed a similar path this year without Florida’s scale of state-run policies. Lawmakers there enacted a bill requiring insurers to disclose prior rates in renewal notices and created a $10,000 tax credit for homeowners who install storm-resistant roofs, building on an existing state grant program offering the same amount. Those measures, combined with the state’s first hurricane-free year in a decade, are projected to hold Louisiana’s average premium essentially flat at $5,035 in 2026 after a 39 percent surge in 2024 alone.
Whether that combination of regulation and calmer weather proves durable will be tested the next time a major hurricane makes landfall. Insurify’s projections assume more typical storm activity returns in 2026 after the rare hurricane-free year in 2025, and the firm’s own analysis notes that an active season could push premiums higher across Gulf Coast states in 2027 regardless of any legislative changes enacted in the meantime.
This article was researched and drafted with the assistance of artificial intelligence.
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