US home insurance becoming increasingly unaffordable: IRC

The average cost of home insurance in the US has increased faster than inflation over the past 20 years, driven by natural disasters, higher repair costs, supply chain disruptions, and population shifts into high-risk areas, according to the Insurance Research Council (IRC).

A new research brief from the IRC finds that insurance spending has consistently outpaced income growth, with affordability reaching its lowest point in 2024.

In 2022, US households spent 2.09% of their income on home insurance, up from 1.19% in 2001. That number is expected to rise to 2.4% in 2024.

Dale Porfilio, president of the IRC, said, “This steady upward trajectory signals ongoing challenges in the insurance market.

“From natural disasters and legal system abuse to escalating repair costs and fraud, the pressures on insurance costs are significant, and they are driving premiums higher for consumers.”

The report also highlights major geographic differences. In 2022, Utah, Oregon, and Alaska were the most affordable states for home insurance, while Louisiana, Florida, Mississippi, Oklahoma, and Arkansas were the least affordable. Although Florida remained the second least affordable, it saw a slight improvement from 2021. Legislative reforms enacted in the state in 2022 and 2023 have helped reduce property claim lawsuits and encouraged more private insurer participation, though the full effects are not yet reflected in the data.

Porfilio added, “Understanding what’s driving insurance costs at the state level can help leaders make informed decisions to protect consumers and ensure continued access to essential coverage.”

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