The escalating impact of climate change has led to a rise in the frequency and severity of destructive weather events, rendering more areas high-risk and unprofitable for insurance companies.
While states with milder weather conditions may not experience immediate surges in insurance premiums, the First Street Foundation’s Climate Abandonment Areas report cautions that “no part of the country is safe from climate disasters.” This serves as a warning that the effects of climate change can potentially impact all regions, regardless of their historical weather patterns.
Here are the 10 least affordable states for homeowners insurance, according to a report by Insurify.
10. Colorado
- Average annual home insurance cost: $3,308
- Home insurance cost compared to the U.S. average: 87% higher
- Affordability Score: 45.7
*The Affordability Score is based on a scale of 0–100 with 100 being the most affordable and 0 being the least affordable.
Insurers in Colorado have been facing challenges in maintaining profitability, leading to significant increases in insurance premiums in recent years, as reported by the Colorado Division of Insurance Homeowners’ Insurance Availability Study. The state’s high loss ratios have been further exacerbated by wildfire activity, potentially resulting in limited coverage options for homes in high-risk areas.
In 2023, Colorado experienced extreme weather conditions, including cold snaps, temperature swings, and heavy rainfall. The state recorded the fourth-wettest May on record, followed by a hailstorm with three-to-four-inch hail in the Eastern Plains.
Dr. Russ Schumacher, Colorado’s state climatologist, attributed the intensified severe weather to climate change, noting that wet years are becoming wetter, dry years are becoming drier, and overall weather variability and extremes are increasing.
9. New York
- Average annual home insurance cost: $1,942
- Home insurance cost compared to the U.S. average: 10% higher
- Affordability Score: 42.1
*The Affordability Score is based on a scale of 0–100 with 100 being the most affordable and 0 being the least affordable.
New York, particularly the metro area of New York City, has been identified as the most expensive metro area in the United States by the Council for Community and Economic Research (C2ER) Cost of Living Index. As a result, home insurance rates in this area are higher than the national average.
The cost of living is not the sole factor contributing to the increased rates. Recent events, such as damaging floods in the Lower Hudson Valley and severe rainstorms causing disruptions in New York City, have also played a role. Upstate New York has also been affected by destructive blizzards, leading to significant property damage and subsequent insurance claims. These weather-related incidents have heightened the risk of claims and, consequently, have contributed to the rise in home insurance rates.
8. Massachusetts
- Average annual home insurance cost: $1,649
- Home insurance cost compared to the U.S. average: 7% lower
- Affordability Score: 39.3
*The Affordability Score is based on a scale of 0–100 with 100 being the most affordable and 0 being the least affordable.
In contrast to the other states examined in the study, Massachusetts has home insurance rates that are lower than the national average. However, the state experienced a significant increase in costs, with rates rising at a 582% higher rate than income in 2023, marking the largest disparity between insurance rate hikes and wage growth.
During the summer of 2023, Massachusetts encountered a series of floods, making it the second-wettest summer on record in Boston. It’s important to note that flooding is typically covered by a separate flood insurance policy, not standard homeowners insurance. Massachusetts also faces other challenges, including extreme storms, rising temperatures, and wildfire risk.
To address these challenges, the state introduced the ResilientMass Plan last year, which aims to enhance the resilience of Massachusetts properties against the escalating impact of severe weather events. The plan involves updating building codes and exploring buyout programs for high-risk areas.
7. Nebraska
- Average annual home insurance cost: $3,519
- Home insurance cost compared to the U.S. average: 99% higher
- Affordability Score: 35.5
*The Affordability Score is based on a scale of 0–100 with 100 being the most affordable and 0 being the least affordable.
Homeowners insurance in Nebraska is nearly double the national average, with the average annual rate rising by 14% in 2023.
Similar to many Great Plains states, Nebraska encounters severe weather throughout the year. Winter brings snow, ice storms, and blizzards, while warmer months are characterized by hail, flash floods, strong winds, and tornadoes. In October 2023, eastern Nebraska experienced downed power lines and trees due to high winds, along with quarter-sized hail from a storm originating in the Central Rockies.
Nebraska’s temperatures now closely resemble those of the 1930s Dust Bowl era and have increased by over 1.6°F since the early 20th century, as indicated by a report from the NOAA National Centers for Environmental Information (NCEI). The NCEI forecasts a rise in extreme precipitation events and flooding as climate change continues to unfold.
6. Georgia
- Average annual home insurance cost: $2,173
- Home insurance cost compared to the U.S. average: 23% higher
- Affordability score: 33.5
*The Affordability Score is based on a scale of 0–100 with 100 being the most affordable and 0 being the least affordable.
In 2023, homeowners insurance rates in Georgia saw a significant increase of 17%, while the median household income only rose by 2.6%, based on estimates from the Bureau of Labor Statistics (BLS) and data from the U.S. Census Bureau.
Georgia faced multiple severe weather events in 2023, with Hurricane Idalia being just one of them. In total, the state experienced 12 natural disasters that resulted in at least $1 billion in damage each, totaling $38 billion, according to NOAA data.
In June, Farmers Insurance made an attempt to non-renew policies for Georgia homes with roofs older than 15 years. However, this plan was deemed “against Georgia law” by Georgia Insurance and Fire Safety Commissioner John King, leading Farmers to abandon the initiative.
5. Kansas
- Average annual home insurance cost: $3,245
- Home insurance cost compared to the U.S. average: 83% higher
- Affordability score: 29.8
*The Affordability Score is based on a scale of 0–100 with 100 being the most affordable and 0 being the least affordable.
In 2023, home insurance rates in Kansas rose by 19%, largely influenced by severe weather events. FEMA issued a major disaster declaration for 20 Kansas counties affected by storms, winds, tornadoes, and flooding in July. Additionally, in October, severe winds and hail the size of baseballs caused damage to as much as 70% of homes in Lewis, Kansas, as reported by local station KSN.
Kansas is also susceptible to wildfires, particularly during prolonged periods of drought. In response to fires across the state, Governor Laura Kelly issued emergency declarations in April, June, and September.
Despite the median home value in Kansas being 40% lower than the national average, home insurance rates in the state are 83% higher than the national average, as per U.S. Census Bureau data. This significant difference suggests that buying a house in Kansas might not offer the cost savings it initially appears to provide.
4. Texas
- Average annual home insurance cost: $3,969
- Home insurance cost compared to the U.S. average: 124% higher
- Affordability score: 23.3
*The Affordability Score is based on a scale of 0–100 with 100 being the most affordable and 0 being the least affordable.
In 2023, home insurance rates in Texas surged by 18%, which is 452% higher than the wage growth. The state experienced 16 weather events that caused over $1 billion in damage each, totaling $56.9 billion, according to the NOAA.
Texas regulators approved some of the most substantial home insurance rate increases in the first half of 2023, as indicated by an analysis by S&P Global. Among the 39 approved increases in the state, Allstate received the highest hike at 24.1%.
The cost of home insurance in Texas has now reached nearly $4,000 annually. Texas is already susceptible to hurricanes and flooding, leading to costly insurance claims. With the increasing severity of weather events due to climate change, residents could expect to see further premium increases.
3. Mississippi
- Average annual home insurance cost: $4,017
- Home insurance cost compared to the U.S. average: 127% higher
- Affordability score: 17.3
*The Affordability Score is based on a scale of 0–100 with 100 being the most affordable and 0 being the least affordable.
In 2023, Mississippi homeowners experienced an average insurance rate increase of 23%, likely driven by what the National Weather Service described as “unprecedented, historically destructive severe weather” across the Deep South in June 2023.
Mississippi boasts the second-lowest cost of living in the U.S., according to the Council for Community & Economic Research (C2ER). However, despite this, U.S. Census Bureau data shows that the median household income in Mississippi is $52,985, and nearly 20% of the population lives in poverty. In 2023, Mississippi home insurance rates increased by 433% more than the income in the state.
2. Oklahoma
- Average annual home insurance cost: $4,782
- Home insurance cost compared to the U.S. average: 170% higher
- Affordability score: 6.0
*The Affordability Score is based on a scale of 0–100 with 100 being the most affordable and 0 being the least affordable.
In 2023, Oklahoma witnessed a staggering 24% increase in the average annual home insurance rate, making it the second-highest in the nation. Oklahoma Insurance Commissioner Glen Mulready attributed the rising home insurance costs to “weather” and the escalating cost of building materials due to inflation, as reported by Oklahoma’s News 4.
In February 2023, tornadoes and storms brought severe wind gusts of 55 to 85 mph and golf-ball-sized hail. Subsequently, in June, severe storms resulted in $3.8 billion in damage across the Central and Southern U.S., with the majority of the damage occurring in Oklahoma, according to the National Oceanic and Atmospheric Administration (NOAA).
Despite the median home value in Oklahoma being nearly 50% lower than the national average, U.S. Census Bureau data highlights that with insurance rates on the rise, homeownership in Oklahoma may not be as attainable as property values would suggest.
1. Florida
- Average annual home insurance cost: $9,213
- Home insurance cost compared to the U.S. average: 421% higher
- Affordability score: 0.0
*The Affordability Score is based on a scale of 0–100 with 100 being the most affordable and 0 being the least affordable.
In 2023, Florida experienced severe weather damages exceeding $15 billion, with Hurricane Idalia alone causing $3.6 billion in damage. This led to several major home insurers ceasing to renew certain policies or exiting the Florida market altogether, resulting in a 14% increase in home insurance rates and making Florida the most expensive state for home insurance.
Due to the high hurricane risk, Farmers discontinued offering home, auto, and umbrella policies in July 2023. Progressive also opted not to renew approximately 100,000 high-risk home policies. With limited private options for homeowners insurance, over 1.4 million homeowners have turned to the not-for-profit Citizens Property Insurance Corp., Florida’s insurer of last resort.
Insurance fraud has further contributed to the rising rates in the state, with Bankers Insurance Group ceasing to underwrite home insurance policies in Florida due to fraud. In response, Florida’s government passed multiple pieces of legislation last year aimed at combating frivolous lawsuits and stabilizing the insurance industry.
