Home insurance costs are climbing across the United States, with new research indicating that Hispanic and Black communities are paying more than most.
Here's what to know
Home insurance costs are spiking, and the burden is not falling evenly. As Inside Climate News reported, research released in July by the Consumer Federation of America found large pricing differences by community makeup.
In predominantly Hispanic ZIP codes, comparable policies cost about 30% more, or roughly $950 extra per year compared to predominantly white communities. In predominantly Black ZIP codes, the difference was about 16%, or around $500 annually.
Inside Climate News reported that the study matched identical policies across communities, meaning the pricing gaps were not explained by differences in the homes, the policyholders, or the coverage selected. The report said local risk conditions may account for some of the disparity, but a sizable gap remained even after those factors were considered.
The report estimated that, over a 30-year mortgage, those disparities would add up to at least $28,500 in extra insurance costs for homeowners in Hispanic communities and $15,000 for homeowners in Black communities.
Sharon Cornelissen, director of housing at the Consumer Federation of America and a co-author of the report, said, "We've talked a lot about our insurance affordability crisis. What we haven't really talked about is sort of the racially inequitable impacts of that, and that Black and Hispanic homeowners are particularly struggling."
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Some states had bigger gaps than others. In Florida, homeowners in predominantly Hispanic ZIP codes were paying 58% more on average for comparable coverage. For predominantly Black ZIP codes, the widest gap was in Michigan, where homeowners paid 74% more.
More background
The report says these disparities reflect the long legacy of redlining, which blocked many Black families and other communities of color from equal access to mortgages and the wealth-building benefits of homeownership.
Inside Climate News reported that while the Fair Housing Act outlawed redlining in 1968, its effects still shape neighborhood investment, property values, and exposure to climate-related risks.
Climate change is increasing the frequency of billion-dollar disasters, while insurance costs for a typical homeowner rose 24% between 2021 and 2024.
Insurers reject the claim that race is influencing rates. In a statement provided to Inside Climate News, Insurance Information Institute spokesman Mark Friedlander said, "Using race, or any proxy for race, to set insurance rates is illegal in every US jurisdiction, and state insurance regulators review and approve the rating factors insurers use precisely to guard against that."
"Many of the communities cited in reports like this are located in areas with objectively higher catastrophe exposure or higher costs to rebuild and repair after a loss," Friedlander added.
The report cited a $17.5 million settlement from the 1990s tied to claims that Nationwide steered agents away from selling in Black neighborhoods, labeled Black ZIP codes undesirable, and used racial profiling to deny insurance to Black homeowners.
American Family Mutual Insurance Company also agreed to a settlement of more than $16 million with Black homeowners who were sold inferior policies and, in some cases, denied coverage because of race.
The report further warned that newer pricing methods, including proprietary premium-setting and claims systems — some involving artificial intelligence — could create discriminatory impacts.
What's being done?
There is a clear need for stronger state enforcement of fair housing laws, along with greater transparency and accountability.
Cornelissen said, "I'm not saying that they have some secret race factor that they put into their model. A lot of this bias can kind of creep in if they're not paying attention to potential unequal impacts. A lot of this could be through AI models or other factors that have a disproportionate impact on Black and Hispanic communities."
Friedlander told Inside Climate News that lowering risk is the best way to make insurance both more affordable and more equitable, pointing to resilience measures such as tougher building codes and more mitigation funding.
Moira Birss, senior fellow at the Climate and Community Institute, said, "Unless the insurance industry wants to give us more information about why this is happening, it's pretty hard not to interpret this as pretty serious racial discrimination."
Where can I learn more?
The stories below look at how catastrophe exposure, opaque pricing, and strain in regional insurance markets are changing what homeowners pay — and in some cases whether they can hang on to coverage at all.
• Across Florida, questions about soaring premiums are intensifying as insurers cite mounting losses and risk.
• New property models show how wildfire danger varies home by home, reshaping insurance pricing.
• In Houston, soaring insurance costs for homeowners hint at pressures other climate-exposed regions could face.
• Oklahoma's highest home insurance rates reflect how repeated storms can push premiums ever higher.
• Major insurers are dropping coverage for young people as nonrenewals spread in riskier markets.
These stories also make clear that climate risk underscores why transparency matters, especially when the biggest increases are hitting households with the least room in the budget to absorb them.
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