Is Homeowners Insurance Going Up Because of Climate Change?

Over the past few years, you may have noticed a sizeable increase in your homeowners insurance premiums. In reality, your policy's rates have likely increased due to several factors, and climate change is just one of them. However, climate change has played a significant role in how home insurance companies are calculating higher premium rates.

Luckily, a local independent insurance agent can still help you find affordable home insurance nearby. They'll shop and compare policies and quotes from multiple companies to help you get the best deal on coverage. But first, let's take a closer look at why and how climate change is causing your home insurance rates to go up.

Have Homeowners Insurance Rates Increased in 2025?

Home insurance premium rates have indeed been increasing in recent years. This year, the average cost of homeowners insurance is $2,110 annually for a policy with $300,000 in dwelling coverage. As such, home insurance premiums have increased by an average of 21% across the country over the past couple of years. This translates to an annual increase of $244 on average for affected policyholders.

Has Climate Change Caused the Cost of Home Insurance to Go Up?

Yes, climate change has greatly impacted increasing home insurance rates, especially in some U.S. states. Home insurance companies have had to hike their premiums to compensate for their increased risk due to the elevated number and severity of certain types of natural disasters, such as wildfires and hurricanes. Some of the biggest examples of natural disasters that have influenced rising home insurance premiums include extremely cold weather in Texas, hurricanes in North Carolina and Florida, tornadoes in the central region of the U.S., and wildfires in southern California. 

Overall, there were more than 20 reported billion-dollar natural disasters in the country last year. While the average number of billion-dollar disasters in the U.S. was just 8.5 annually from 1980 to 2023, this average has increased dramatically to 20.4 events within the past two years alone. The rapidly changing climate is creating more frequent storms and costlier destruction as a result. In turn, homeowners must pay more to protect their property.

Why Climate Change Affects Your Home Insurance Premiums

Natural disasters are not only happening more often, but they're also becoming more severe and less predictable. More and more storms are now occurring "off-season," or during times of the year when they're typically not expected based on past weather trends. The increased severity, frequency, and unpredictability of natural disasters in many areas of the country results in more expensive homeowners insurance premium rates.

The dwelling coverage section of home insurance is designed to protect the structure of your home against numerous perils, including several types of natural disaster damage. Similarly, your home insurance's contents coverage section is meant to protect your personal property against damage and destruction caused by many perils, including many kinds of natural disasters. Your home insurance policy also likely includes additional living expenses coverage, which can reimburse you for hotel costs and other related expenses if you must find temporary lodging while your home undergoes repairs due to a covered disaster, such as wind, fire, or hail damage.

Essentially, the risk of policyholders filing home insurance claims in any of these coverage sections is increasing as the risk of severe weather increases. As such, home insurance companies hike their premium rates to better protect themselves against bankruptcy due to having to pay out more frequent and more expensive claims. However, if you're unhappy with how much your home insurance rates have gone up, you can shop around for a cheaper policy with the help of an independent insurance agent in your area.

Climate Change Is Also Making Coverage Harder to Get

Not only is home insurance getting more expensive in many areas, but it's also becoming much more difficult to obtain in certain locations. Some home insurance companies have decided the risk of writing policies in high-risk states isn't worth it anymore. In fact, several big names in the insurance industry, including Safeco, Allstate, Farmers, and State Farm, have either withdrawn or limited their coverage offerings in high-risk states.

This is another reason that home insurance premiums have increased in the past couple of years as a result of climate change. Because so many homeowners insurance companies have pulled or seriously limited their coverage in certain areas, customers have fewer options to choose from. As a result, the carriers that still offer policies in these locations implement stricter underwriting criteria to adjust for the change in competition, which means higher premiums.

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Where Are Home Insurance Rates Increasing the Most?

When you initially think of increasing home insurance rates, you might expect them to be changing the most in states like Texas, California, and Florida. In reality, you might be surprised to learn that none of these states have actually seen the biggest increases over the past year. Here are the top 10 states that had the biggest home insurance rate hikes last year.

All but two of these states experienced at least a 10% increase in home insurance premiums on average. North Carolina is already scheduled to undergo additional home insurance premium surges this year and again next year, with a 7.5% average increase set for June 1, 2025, and another 7.5% average increase one year later.

Keep Weather Patterns in Mind When Shopping for Homeowners Insurance

If you live in an area with a history of extreme weather, be prepared to pay more for homeowners insurance. Your insurance premium may eventually rise even more if climate change leads to increasing losses for insurance companies in the coming years. So, take some time to review your homeowners insurance policy now. Carefully assess your property’s current value and consider the possibility of more hail, wind, and water damage in the coming years. Most importantly, talk to your independent insurance agent about what is and isn't covered by your policy and purchase additional coverage to fill the gaps, if necessary.

Additionally, many homeowners who previously didn't have to purchase flood insurance may now need this coverage. In recent years, unexpected floods have caused serious damage in areas that never before experienced flooding, and more frequent and severe flooding has been hitting areas that were formerly at a lower risk. As recently as late 2024, several areas of Connecticut experienced historic flooding that led to the destruction of 80 businesses and 19 homes, and an estimated $300 million in total damage. Unfortunately, many homeowners didn't have flood insurance, and flood damage isn't covered by home insurance. To avoid paying out of pocket to repair or rebuild your home due to natural flooding disasters, work with an independent insurance agent to get flood insurance.

Can Going Green Help Me Save Money on Home Insurance?

Many environmentally conscious homeowners go to great lengths to have energy-efficient, sustainable “green” homes. Having a green home can help you reduce your family’s carbon footprint and save money on your utility bills. Further, it can help you save money on your homeowners insurance.

Today many leading home insurance companies offer special coverage and discounts for homes that are already green (typically those that are LEED-certified), as well as incentives to rebuild after a loss using sustainable materials, energy-efficient appliances, and other green building practices. Talk to your independent insurance agent about green home insurance discounts that could help you save money on home insurance.

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Here's How an Independent Insurance Agent Can Help

Independent insurance agents know that climate change is impacting home insurance rates, and they know where to find the most affordable coverage around. Your agent can shop and compare quotes and policies from numerous local carriers for you to find the best deal. And down the road, if you ever need to file a home insurance claim or update your policy, your agent will be there to assist you.