Home Insurance Premiums Surge: States and Insurers Driving the Biggest Increases

A recent analysis by S&P Global Market Intelligence reveals significant increases in homeowners insurance rates across the U.S. in 2024. Nebraska led the way with a staggering 22.7% rise, while 33 states experienced double-digit premium hikes. American Family Insurance, which raised rates in 42 states, topped the list of insurers with the highest increases.

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The S&P Global report, based on filings approved through December 2024, calculated a national average rate increase of 10.4% for homeowners insurance last year. This follows a 12.7% increase in 2023, putting the two-year cumulative rise at 24%. States such as Montana, Iowa, Minnesota, Utah, and Washington also saw rate increases exceeding 20%.

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Midwest states, notably Minnesota and Iowa, faced some of the highest rate hikes and direct loss ratios in 2023. Conversely, Florida recorded the lowest increase at just 1%. However, this figure excludes adjustments made by Citizens Property Insurance Corp., the state-backed insurer of last resort.

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American Family Insurance reported its most significant rate hikes in Missouri (30.1%), Illinois (27.5%), and Nebraska (27.1%). Over the past two years, the Wisconsin-based insurer increased rates by an average of 31% nationwide. In contrast, State Farm, the largest homeowner insurer, kept its two-year average rate increase below 20%.

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While homeowners premiums rose by 45% from 2019 to 2024 among the top 10 insurers, State Farm reported the smallest increase of 24%. Liberty Mutual saw the second-highest rate hike in 2024 at 14.5%, with a two-year jump of nearly 37%. The S&P Global analysis also includes a detailed state-by-state breakdown of rate changes for 2019–2024.

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Improved Profitability in Homeowners Insurance

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An AM Best report highlighted a 13.8-point improvement in the homeowners loss ratio during the first nine months of 2024 compared to 2023. This improvement stems from aggressive rate adjustments, better catastrophe risk management, and enhanced pricing strategies.

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Despite challenges from Hurricane Helene, homeowners insurance posted the most significant underwriting gains among personal lines. David Blades, AM Best’s associate director, noted optimism for full-year results. However, Hurricane Milton, which occurred in the fourth quarter, is expected to have a greater impact.

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The commercial property segment saw the second-highest improvement in underwriting profits, with a 10.7-point drop in the loss ratio. Personal auto insurance also improved by nearly 10 percentage points, driven by a 14% increase in direct premiums written.

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Travelers, the first major insurer to release full-year earnings, reported strong results for 2024. The company achieved a combined ratio of 93.9 in its homeowners line despite significant catastrophe losses, with renewal premiums averaging a 14.1% increase in the fourth quarter.

With insurers adopting aggressive pricing strategies and enhanced underwriting practices, homeowners insurance remains a dynamic and evolving sector.

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