In Wilmington, North Carolina, Joy Sharp recently received a homeowners insurance renewal rate of $6,000, more than four times the $1,400 she paid eight years ago. The surge in premiums, mirroring experiences across the country, isn’t solely attributable to inflation or increased rebuilding costs, but a fundamental shift in risk assessment by insurance companies grappling with the escalating financial toll of extreme weather events.
Premiums nationwide jumped an average of 11.3% in 2023, with some states – Arizona, Texas, and Utah – experiencing increases exceeding 20%, according to S&P Global Market Intelligence. Sam Weitzner, a Florida homeowner, saw his annual coverage climb from $1,500 in 2017 to nearly $6,000, prompting him to switch insurers to manage the escalating costs. “It was affecting our mortgage payment and we just weren’t able to make ends meet with that,” Weitzner told CBS News.
The Consumer Federation of America recently released a report detailing the dramatic increase in homeowners insurance premiums between 2021 and 2024, finding that costs rose in 95% of U.S. ZIP codes. The report, titled “Overburdened: The Dramatic Increase in Homeowners Insurance Premiums and Its Impacts on American Homeowners,” identified extreme weather as a key driver of these increases, alongside inflation and rising rebuild costs. States experiencing the most significant percentage increases included Utah (59%), Illinois (50%), and Arizona (48%).
Federal Reserve Chair Jerome Powell acknowledged the trend earlier this year, telling Congress that insurers and banks are already retreating from high-risk areas, including coastal communities and wildfire-prone regions of California. Powell warned that, within a decade or fifteen years, obtaining a mortgage could become impossible in certain parts of the country. The cumulative effect of rising premiums cost single-family homes an extra $21 billion over the three-year period examined by the Consumer Federation of America.
The increasing frequency and severity of natural disasters – hurricanes, wildfires, floods, and severe storms – are forcing insurers to reassess risk and adjust premiums accordingly. The report highlights that climate change is not only increasing costs but too creating greater uncertainty about future losses, prompting insurers to attempt to better predict and price for potential events.
While proactive roof maintenance can help mitigate some risk and potentially lower premiums, the underlying issue remains the escalating impact of climate change on the insurance market. The report suggests that economic factors contributing to premium increases may stabilize as the economy improves, but the trend of more extreme weather is expected to continue and potentially worsen as the planet warms.
The implications extend beyond individual homeowners. Falling property values in uninsurable areas could strain local governments, which rely on property taxes to fund essential public services. As of June 10, 2025, no federal legislation addressing the issue of escalating insurance costs related to climate change has been passed.
