Homeowners Insurance Costs Are Surging: How to Save

If you've opened your homeowners insurance renewal lately and felt your stomach drop, you're not alone. Across the country, premiums have been climbing steadily, and 2026 is no exception. The average homeowner now pays between $2,500 and $2,800 a year for coverage, according to Bankrate and NerdWallet — and in high-risk states like Florida, Nebraska, and Oklahoma, it can be significantly more.

I know this firsthand because I recently helped a friend in Colorado shop for new coverage after her renewal jumped 22% in a single year. It felt like sticker shock on top of sticker shock. But here's the thing: while you can't control the weather or global reinsurance markets, you have more power over your premium than you might think.

Let's dig into what's driving these increases — and, more importantly, what you can actually do about it.

Why Is Homeowners Insurance Getting So Expensive?

There's no single villain here. It's a combination of forces that have been building for years.

Climate and Extreme Weather

This is the big one. The U.S. experienced 27 separate billion-dollar weather disasters in 2024 alone, according to NOAA — the highest count on record at that time. From wildfires in the West to hurricanes along the Gulf Coast to increasingly destructive hailstorms in the Midwest, insurers are paying out more in claims than ever before. Those costs get passed along to policyholders through higher premiums.

Rebuilding Costs Are Still Elevated

Even though inflation has cooled from its 2022 peak, the cost of actually rebuilding a damaged home remains stubbornly high. Labor shortages in the construction trades, tariffs on imported building materials, and supply chain disruptions all contribute. When it costs more to fix a house, it costs more to insure one.

Reinsurance Is More Expensive

Here's something most homeowners never think about: insurance companies buy their own insurance, called reinsurance, to protect against catastrophic losses. Global reinsurance costs have skyrocketed in recent years, and those costs trickle down to your premium. It's essentially inflation for your insurer, and they're passing the bill along.

The State-by-State Picture

Where you live matters enormously. Colorado, Texas, and Georgia saw some of the steepest rate hikes in 2025, driven by a combination of wildfire exposure, severe storms, and rising construction costs. Meanwhile, states like Vermont, Delaware, and Alaska tend to have the lowest premiums — largely because they face fewer natural disaster risks.

Is There Any Good News?

Actually, yes. The rate of increase is slowing down. According to Cotality, a real estate analytics firm, home insurance rates are expected to rise about 8% in 2026 — still significant, but a deceleration from the double-digit jumps many homeowners saw in 2023 and 2024. And Sean Harper, CEO of insurer Kin, has noted that "substantial premium increases were the story in 2024, but they weren't the story in 2025 except in a few places like California, and they won't be the story in 2026."

That's a sign that the market is stabilizing. It doesn't mean your rates are going down — but the pace of increases may feel more manageable. And in the meantime, there are concrete steps you can take to fight back.

Seven Ways to Lower Your Homeowners Insurance Premium

1. Shop Around Every Year

This is the single most impactful thing you can do. Every insurer uses its own proprietary formula to calculate your premium, which means the same house in the same neighborhood can get wildly different quotes from different companies. I recommend getting at least three to five quotes every time your policy is up for renewal. It takes an afternoon, but it can easily save you hundreds of dollars.

Online comparison tools from sites like Policygenius or The Zebra can speed up the process, but also consider reaching out to an independent insurance agent who represents multiple carriers. They can sometimes access pricing that isn't available through online marketplaces.

2. Bundle Your Policies

If you have auto insurance and homeowners insurance with different companies, you're likely leaving money on the table. Most major insurers offer a multi-policy discount — typically 5% to 25% off your home premium — when you bundle. It's one of the easiest wins available.

3. Raise Your Deductible

Your deductible is the amount you pay out of pocket before your insurance kicks in. Moving from a $1,000 deductible to a $2,500 deductible can lower your premium by 10% to 15%, according to data from the Insurance Information Institute. The key is making sure you have that deductible amount in your emergency fund so you're covered if something happens.

Think of it this way: you're essentially self-insuring for smaller losses in exchange for a lower annual cost. Over time, the math usually works in your favor — especially if you rarely file claims.

4. Invest in Home Mitigation

Insurers reward homeowners who take steps to reduce their risk profile. Depending on where you live, this could mean installing storm shutters or impact-resistant windows in hurricane zones, upgrading to a Class 4 impact-resistant roof in hail-prone areas, creating defensible space around your property in wildfire regions, or adding a sump pump and backup battery in flood-prone zones.

These improvements can qualify you for discounts of 5% to 20%, and they also genuinely protect your home. It's a win-win. When you make improvements, document everything — take photos, keep receipts, and let your insurer know so they can adjust your rating.

5. Improve Your Credit Score

In most states, insurers use a credit-based insurance score as one factor in determining your premium. A higher credit score generally translates to a lower premium. If your credit has improved since you last shopped for insurance, you may be eligible for better rates. This is yet another reason to stay on top of your credit health — something we've covered extensively on this blog.

6. Avoid Filing Small Claims

This one's counterintuitive, but important. Every claim you file goes on a database called CLUE (Comprehensive Loss Underwriting Exchange) that insurers use when pricing your policy. Filing a $500 claim might get you reimbursed today, but it can lead to higher premiums — or even non-renewal — down the road. As a general rule, I only recommend filing claims for significant losses that would genuinely hurt your finances. For smaller repairs, it's usually smarter to pay out of pocket and preserve your claims history.

7. Pay Your Premium Annually

If you're paying your premium in monthly installments, you may be paying a convenience fee without realizing it. Many insurers offer a discount of 5% to 10% when you pay the full annual premium upfront. If cash flow allows, this is an easy way to shave a bit off your total cost.

What Homeowners Insurance Doesn't Cover

While we're talking about your policy, it's worth a quick reminder about common gaps in standard coverage. Most homeowners insurance does not cover flood damage (you'll need a separate flood policy, often through FEMA's National Flood Insurance Program), earthquake damage (a separate policy is needed in most states), routine maintenance or wear and tear, or sewer backup (though you can usually add this as a rider for a small additional cost).

If you're in an area with any of these risks, talk to your agent about supplemental coverage. It's better to pay a little more now than to discover a gap after a disaster.

The Bottom Line

Homeowners insurance premiums are rising, and that trend isn't reversing anytime soon. But you're not powerless. Shopping around annually, bundling policies, raising your deductible strategically, and investing in home mitigation can collectively save you hundreds — even thousands — of dollars over time.

The most important step? Don't just auto-renew your policy year after year. Treat your insurance like any other recurring expense and review it actively. Your future self will thank you.