Projected Increases in Home Insurance Rates by 2026

Homeowners across several states in the United States should prepare for significant increases in home insurance rates by 2026, according to a forecast by Insurify. The report indicates that average home insurance costs are expected to rise by approximately 4% by the end of 2026, marking the fifth consecutive year of increases. The primary drivers of these hikes are severe weather events and natural disasters, which have resulted in substantial insured losses.

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The report highlights that severe convective storms, which can produce tornadoes and hail, have caused extensive damage, particularly in the Midwest and Great Plains. In 2025 alone, these storms led to over $52 billion in insured losses, ranking as the third-highest total on record, following 2023 and 2024. Additionally, wildfires in Southern California inflicted more than $250 billion in damages during the same year. In response to these escalating risks, insurers are adjusting their policies to limit claims exposure, which often translates to increased financial risk for homeowners.

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Insurify's analysis identifies California, Nebraska, New Mexico, and Georgia as the states projected to experience the most significant rate increases in 2026, with anticipated hikes of 16%, 13%, 11%, and 10%, respectively. This forecast follows substantial rate increases in 2025, where states like Minnesota (34%), Colorado (33%), and Iowa (28%) saw sharp rises in insurance costs.

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Research from Florida State University indicates that a 10% increase in homeowners insurance can lead to a 4.6% decline in housing prices. This correlation suggests that rising insurance costs may have broader implications for the housing market, potentially affecting home values and affordability.

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Despite the overall trend of increasing rates, the report notes that some states may see a decrease in home insurance rates by the end of 2026. Hawaii, Massachusetts, Maine, Louisiana, and Rhode Island are projected to experience reductions of up to 2%.

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Insurify's report underscores the ongoing challenges faced by homeowners due to climate-related events and the resulting financial implications. The organization emphasizes the need for homeowners to stay informed about potential changes in their insurance policies and costs.

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Critics argue that the insurance industry's response to climate change is inadequate, as rising premiums may disproportionately affect low- and middle-income families. There are concerns that the increasing costs could lead to a housing crisis, particularly in states already facing economic challenges.

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“Severe convective storms, which can conjure tornadoes, hail, and other perils, have wrought damage across the U.S. in recent years, particularly in the Midwest and Great Plains states,” — Insurify Report

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“Insurers are changing their policies to minimize their claims exposure, according to Insurify, which often means more risk for homeowners.” — Insurify Report

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This forecast serves as a critical reminder of the ongoing impact of climate change on the insurance industry and the financial burden it places on homeowners across the nation.

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