Homeowners Insurance Rates Spiking in Your State? Here’s What You Can Do

One benefit of homeownership is that you skip the dreaded rent increases — settling into a steady monthly mortgage amount until you either pay off your home or move.

However, if your homeowners insurance and property taxes are built into your mortgage, your monthly payment amount will fluctuate. For homeowners in some states, that fluctuation has meant a sudden and extreme increase. Let’s take a look at which states are experiencing a spike in homeowners insurance rates and what you can do to soften the blow.

States with the Highest Increases

Inflation has bumped up costs across the board, but for the insurance industry, catastrophic events have amplified the issue. When events like hurricanes, tornados, earthquakes or forest fires happen, insurers face big claims, and that money comes out of the premiums everyone pays.

Disaster has frequented Florida in recent years. The data analytics company Verisk estimated that Hurricane Idalia caused $2.5 to $4 billion in property damage last year, and that’s only one of the disasters to hit the state. The Fort Lauderdale area experienced historic flooding.

“Florida saw severe weather damages exceeding $15 billion in 2023,” said Cassie Sheets, data analyst at Insurify, a company that serves as a virtual insurance agent to help consumers compare policies. “Several major home insurers stopped renewing certain policies or left Florida entirely, and rates increased by 14% in 2023.”

But Florida isn’t the only state facing rate hikes. In fact, it’s not even at the top of the list. These states experienced the highest homeowners insurance premium increases in 2023, according to Insurify:

• Oklahoma (24%)
• Mississippi (23%)
• Kansas (19%)
• Texas (18%)
• Georgia (17%)
• Virginia (16%)
• Nebraska (14%)
• Florida (14%)
• New York (14%)
• Massachusetts (14%)

Don’t Panic Just Yet

You may be nervously checking your statement already, but don’t sound the alarm right away. Rates trending upward in your area doesn’t always mean you’ll see a huge increase at renewal time.

First, don’t immediately switch insurers. While shopping around for insurance can potentially result in lower costs, the rates you’re quoted to win your business may not stick at renewal time.

Second, don’t make any impulsive decisions. Moving to a state with lower homeowners insurance rates may sound like a solution, but there’s no guarantee insurance rates won’t rise in your new home state, so it’s not the logical next step for everyone.

“You’re basically forcing yourself to start a whole new life just because of home insurance costs,” said Dave Flanders, owner/founder at HomeVisors Collective, a team of real estate professionals. “Some factors to consider include the overall cost of living, job opportunities and lifestyle preferences. Homeowners should weigh the pros and cons carefully.”

How to Reduce Your Rates

Whether homeowners insurance rates are rising in your state or not, anyone can benefit from saving a few extra dollars. Here are some steps you can take to lower your rates:

1. Raise Your Deductible

When you file a claim, you’ll be required to pay a deductible. That means, if you set a deductible for $500, you’ll have to pay $500 before your insurer will kick in and pay the rest.

However, a higher deductible usually means lower premiums, said Angel Conlin, chief insurance officer at Kin Insurance.

“That’s because when you accept a higher deductible, your insurer will simply have to pay out less for a claim,” Conlin said.

Filing an insurance claim on a home isn’t something most people do everyday. So instead of maintaining a low deductible, consider boosting it to a higher amount, then setting the premium you’re saving aside.

If you put the saved premiums in an interest-bearing vehicle like a high-yield savings account, you’ll even earn a little extra money.

2. Bundle and Save

Many insurers offer discounts to customers who have multiple policy types on the same plan. Look into your options, and consider bundling your home and auto insurance on the same plan. While you’re at it, look into whether your insurer offers discounts for moving over your life, pet and motorcycle insurance.

Bundling has another benefit. You have everything paid in one place. If you’re paying your homeowners insurance with your mortgage, though, this might not be as much of an issue.

3. Take Advantage of Discounts

Bundling isn’t the only way to save money. Some insurers offer discounts for belonging to an organization or being a part of a certain profession. Military members, veterans and their families also sometimes qualify for insurance discounts.

Being a long-term, loyal customer could also earn you a rate cut. If you’ve been a customer for a while and haven’t filed a claim, reach out to your insurance provider to see if that gets you any deals.

Lastly, if you’re a senior, check into any senior discounts your insurer offers. The AARP partners with insurers to provide member discounts, as well.

4. Rate-Proof Your Home

Insurance is all about risk. For that reason, simply installing a security system or smoke detector could shave a little off your premiums. If your home is near a fire hydrant, you may also pay less than someone whose home is farther away.

The reverse is true, as well. Before installing a pool, look into what that will do to your homeowners insurance rates. Your location also is taken into consideration before you’re quoted a rate. If you love your area, but your beachfront home becomes too expensive to insure, moving farther away could make things more manageable.

5. Consider a Move

While moving might not always be the best choice, it can’t hurt to start researching other states. You’ll be prepared if insurance hikes strain your budget past the point of no return.

It’s also wise to keep an eye on your insurance options. Florida alone has seen a number of insurers either become insolvent or leave the state altogether in the past couple of years.

“Some homeowners will have fewer options for coverage as insurers leave high-risk states,” Sheets said. “Buying in an area with fewer severe weather risks could save homeowners from exorbitant climate-related rate hikes — for now.”

Watching rates increase and provider options decrease can feel frustrating. But if you are seeing those changes, it’s important not to panic. Instead, look into ways you can reduce your rates and stay in the home you love.

Stephanie Faris is a professional finance writer with more than a decade of experience. Her work has been featured on a variety of top finance sites, including Money Under 30, GoBankingRates, Retirable, Sapling and Sifter.