Rising homeowners premiums are increasingly being accompanied by fewer coverage options in parts of the US, widening the gap between markets where insurers are still competing and those where more risks are being pushed into E&S or residual plans.
The Insurance Information Institute's new Insurance Affordability Index shows homeowners insurance took up an estimated 2.4% of median household income in 2025, up 24% from 2020. Personal auto insurance accounted for 1.7%, up 9% over the same period. Beyond the premium figures, the index also tracks residual market share, E&S penetration and regulatory rate-approval times - showing where higher premiums are being compounded by tighter carrier appetite. That distinction can mean the difference between a more expensive renewal and a risk that requires new capacity, different terms or a move outside the admitted market.
"Insurance costs vary significantly across America, and for good reason: no two states carry the same catastrophe risk, legal environment or economic pressures," Triple-I CEO Sean Kevelighan said. "The Affordability Index brings the data and cost drivers together in one place, making those differences understandable, not mysterious. It gives consumers, policymakers and the media a common set of facts and a clearer picture of what is shaping insurance costs in each state, helping inform decisions about how and where risks are greatest, how to build and how to better protect what matters most."
Changing placement patterns are already visible. Direct E&S homeowners premiums rose 29.5% to $4.14 billion in 2025, the third consecutive year of growth above 20%, according to S&P Global Market Intelligence data.
The expansion is spreading well beyond coastal catastrophe markets. Colorado's E&S homeowners premiums increased 63.7% to $91.9 million, Texas recorded 63.4% growth to $453.6 million, and Minnesota's volume more than tripled from $7 million to $22.8 million. Severe convective storms, hail losses and reduced admitted carrier appetite contributed to the increases.
California shows how affordability pressure can coincide with constrained capacity. The state had 662 ZIP codes classified as distressed and 668,609 FAIR Plan homeowner and commercial policies in December, according to the California Department of Insurance. Average rate-filing approval time was 336 days - a regulatory timeline that has itself contributed to admitted carriers pulling back, as carriers unable to file for rate adequacy in a timely manner have increasingly exited or reduced appetite.
California surplus lines homeowners policies surpassed 300,000 in 2025. Urban homes in standard metropolitan areas accounted for roughly 90% of E&S placements, showing that non-admitted coverage is increasingly extending beyond properties with obvious wildfire exposure and into the broader residential market.
Florida is moving in the opposite direction. Citizens Property Insurance Corp. had 819,027 policies at the end of May 2025. By August 28, 2026, that figure had fallen to 266,093 - a decline of roughly two-thirds - as business returned to the private market following legislative reforms.
The state's share of nationwide homeowners lawsuits fell from 79% in 2020 to 41% in 2025, while 21 new companies had been approved to enter the residential property market. Average homeowners premiums including wind coverage declined in 51 of 67 counties, while domestic property insurers posted a pooled combined ratio of 83% in 2025. Those improving market indicators have coincided with Citizens' contraction and greater private-market participation - a trajectory that stands in direct contrast to what is happening in California.
The contrast matters for placement. Higher premiums do not necessarily mean fewer options if carriers are still competing for business. But where appetite is retreating, renewals can require a broader search for capacity, different deductibles or terms, or a move into E&S.
"When rates do not fully account for underlying factors, market participation can shift, which may create availability challenges and greater reliance on residual markets. The Affordability Index brings these factors together to show what is driving insurance affordability and market conditions in each state," said Pat Schmid, chief insurance officer at Triple-I and president of the IRC.
That makes affordability an increasingly incomplete measure of market stress. The more telling question is whether insurers are still willing to write the risk - and across the US homeowners market, that answer is becoming increasingly dependent on location.
