Home Insurance Premiums Jump 9.3% to Nearly $2,000 Annually As Climate Change And Tariffs Influence Market

Core Insights - Homeowners are experiencing a 9.3% increase in home insurance premiums in 2025, with the average annual premium now around $1,966 [1][2] Factors Contributing to Increased Premiums - Climate change is leading to more severe weather events, increasing the risk and cost of insuring homes, prompting insurers to raise premiums to cover larger claims [2] - Premiums for new policies have surged approximately 45% since 2022, while the average Coverage A amount has only increased by less than 12%, indicating homeowners are paying significantly more for coverage that does not align with rising rebuilding costs [4] - 64% of mortgage lenders report that high premiums and challenges in finding policies are causing delays in home sales, particularly in states like Florida, Texas, and California, where traditional insurers are withdrawing from the market [5] - The Excess & Surplus market, which insures risks that standard carriers will not cover, has grown to account for about 17% of new policies in certain states, up from less than 2% two years ago [6] Additional Cost Factors - Tariffs on building materials such as steel, lumber, and copper are increasing reconstruction costs, potentially adding nearly $11,000 to the cost of building a new home, which in turn raises insurance premiums [7] - Insurers are shifting more risk to homeowners by increasing deductibles and adjusting pricing based on factors like roof age, which can lead to higher premiums for older or poorly maintained homes [7]