H
omeowners across the US are facing rising insurance costs, but some states are being hit harder than others. In Florida, a staggering 20% of homeowners pay at least $4,000 per year for home insurance, the highest share in the country. Louisiana, Texas, and Colorado also have significant numbers of homeowners paying over $4,000 annually.

    Nationwide, the average cost of home insurance is around $2,300 per year for a policy with a $300,000 coverage limit. This increase is largely due to inflation in building materials and an uptick in weather-related disasters. Insurance companies are responding by raising rates and reducing coverage, particularly in areas prone to extreme weather.

    Higher premiums can make it difficult for homeowners on the edge of their affordability range to meet mortgage payments. Rising insurance costs are also a major concern for potential buyers, who may be forced to settle for lower-priced homes or stay out of the market altogether. In fact, a recent survey found that default servicing leaders view rising tax and insurance costs as the biggest risk factor for mortgage delinquencies.

    Nationally, home insurance rates have risen 34% since 2018, with Texas seeing the largest increase at 60%. If insurance rates continue to climb, it could eventually affect home prices in high-cost areas. Experts warn that markets with high insurance costs may see downward pressure on home prices as buyers seek to balance out insurance costs by purchasing lower-priced homes.