Home insurance rates are on the rise for many customers in the United States.
According to a Consumer Federation of America report, though, homeowners in some states are faced with significantly higher costs than others.
What's happening?
Between 2021 and 2024, home insurance rates rose on average by 24%, with increases hitting as much as 59% higher in Utah, as CNBC Select noted.
The states most affected are the ones with more severe weather events that damage homes, buildings, and properties. As a result, insurance prices rise as more homes are built in areas that are more prone to natural disasters like wildfires and tornadoes.
After Utah, the other most impacted states were Arizona (48%), Illinois (50%), Nebraska (35%), and Pennsylvania (44%).
As Sharon Cornelissen, director of housing for the Consumer Federation of America, said in a statement, "The skyrocketing price of insurance premiums is deepening the housing crisis … and homeowners across the country are feeling the strain."
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Why are increasing insurance prices concerning?
The effects of rising insurance costs are multiple, influencing homebuying, selling property, and stopping people from investing in insurance coverage.
While several factors influence the price of insurance, one of the main reasons is weather-related events.
According to a U.S. Department of the Treasury study, people living in areas more prone to severe weather pay far more for insurance than other areas.
As a result, many homeowners in these locations have difficulty finding quality coverage, if they can find any at all. What's more, renewal agreements are often not being offered to customers, or prices are becoming prohibitively expensive. This poses serious financial concerns.
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Definitely 🙁 What's being done about rising insurance rates?
To reduce rising insurance costs, the state and federal governments need to take action to regulate insurance companies.
Cornelissen suggested that "federal and state policymakers need to take action to address the rising costs and reduce risk for individuals and communities."
Local governments must develop fire-safe landscaping, development, and construction regulations. They should also find ways to reduce the pollution that is exacerbating these extreme weather events, such as discouraging energy companies that burn dirty energy sources like coal, oil, and gas.
For homeowners who want to take action right now, shop around to try to find the best deal rather than relying on the rates offered by current insurers.
Otherwise, cutting pollution is essential to slow the rate of rising global temperatures, which is increasing the risk and severity of extreme weather events that push insurance rates up. Swapping a gas-guzzling car for an electric one, installing solar panels, and eating more plant-based meals are all ways to help reduce the production of planet-warming gases.
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