Ask most homeowners why their insurance bill keeps climbing and they'll assume it's tied to their home's rising value. That assumption turns out to be wrong, and not by a small margin.
Between 2019 and 2024, the median U.S. home price rose about 50%, from $271,900 to $407,500, according to National Association of Realtors data compiled by the Housing Almanac. Over that same five-year window, the amount homeowners actually paid for insurance rose 62%, according to a Federal Reserve Bank of Dallas analysis of ICE McDash mortgage data, which tracks real premium payments across roughly two-thirds of the U.S. mortgage market. Insurance costs didn't just track home values up. They outran them.
The comparison above uses the Dallas Fed's own benchmark figures. Home values are up 50% nationally since 2019. Actual homeowners insurance premiums are up 62%. Reinsurance rates, the cost insurers themselves pay to lay off catastrophe risk, jumped 107% over the same period before beginning to ease.
The gap is even wider in specific states:
|
State |
Insurance premium growth, 2019–2024 |
|
Utah |
+90% |
|
Idaho |
+84% |
|
Florida |
+78% |
|
Texas |
+73% |
|
National average |
+62% |
Home price growth varied just as widely over the same stretch, particularly in fast-growing Mountain West markets like Idaho and Utah, so a single national comparison only tells part of the story. A separate GAO review of the national homeowners insurance market found premiums in southern coastal wind-risk areas rose 25% or more in inflation-adjusted terms alone, even as the national inflation-adjusted average barely moved.
Three forces show up consistently across every analysis of the run-up.
The first is rebuilding cost. Materials and labor to reconstruct a home have climbed steadily since 2020, and the rating bureau Verisk found reconstruction costs alone rose a cumulative 55% between 2020 and 2023, before moderating to a still-elevated 5.2% in the year to July 2024. That single line item, independent of anything happening in the housing market, pushes dwelling coverage limits and premiums up together.
The second is catastrophe losses. The Dallas Fed found insurer losses roughly doubled between 2019 and 2024, driven by more frequent and severe hurricanes, wildfires, floods and convective storms. Some of that shows up in single, eye-catching events: the January 2025 Los Angeles wildfires alone destroyed roughly 12,000 homes and drove more than $22 billion in insurer wildfire claims payouts, while severe convective storms produced more than $52 billion in insured U.S. losses in 2025, the third-highest total on record. Some insurers are now losing money outright on the line: State Farm has said it paid roughly $1.26 in Illinois claims for every $1 collected in premium in 2024.
The third is reinsurance. When primary insurers can't absorb correlated catastrophe losses alone, they buy their own coverage from reinsurers, and that market repriced sharply from 2022 into early 2024 after several years of heavy global losses. Those costs flow directly into what homeowners pay, which is a large part of why reinsurance rates, up 107% over the five-year window, moved even further than premiums themselves.
As private insurers pull back from the highest-risk areas, state-backed "insurer of last resort" programs are absorbing the difference. In California, FAIR Plan enrollment jumped 43% between September 2024 and December 2025, with dwelling policies more than doubling over four years to push total exposure past $458 billion. "The insurance market right now is in a fragile state," Mark Sektnan, vice president for state government relations at the American Property Casualty Insurance Association, said this year.
It isn't only a California story. A trio of economists proposed a federal reinsurance backstop for homeowners insurance to the Brookings Institution's Hamilton Project this year, pointing to a similar exodus of private carriers already underway in Florida, Louisiana and Texas. A residual market growing that fast in multiple states at once is itself a signal that the private market has stopped pricing large swaths of the country at standard rates.
One of the more counterintuitive findings in the Dallas Fed research is that the two inflation measures most people rely on, the Consumer Price Index and the Fed's preferred PCE index, dramatically understate what's happening. The CPI's tenant and household insurance component is built from renters' insurance policies, not homeowners' policies, and rose just 5% over the same 2019-2024 period that actual homeowners premiums rose 62%. PCE nets out insurers' expected claims payouts and rose a comparatively modest 35%. Neither is wrong on its own terms. Both are simply measuring something narrower than what a homeowner's mail actually says.
The steepest increases have passed, but the climb hasn't reversed. Matic's year-end data found the average premium for a new policy rose 8.5% in 2025, down sharply from an 18% jump in 2024, while deductibles climbed another 22% as carriers shifted more first-dollar risk back onto homeowners. Insurify's own tracking puts the national average at $2,948 by the end of 2025, projecting a further 4% rise to $3,057 in 2026. Matic CEO Ben Madick summed up the mood: costs remain high for homeowners, and he expects "climate-related uncertainty" to keep pushing prices upward well into next year.
Ratings agency AM Best has moved its outlook for the sector to stable from negative, citing moderating premium growth and softening catastrophe-reinsurance rates, though it flagged that primary carriers in the most exposed states should expect less relief than the broader market at January 2026 renewals.
"Home values are up" is no longer an adequate explanation for a renewal increase, and clients who track their home's estimated market value against their premium notice will keep asking why the two numbers have diverged. The more defensible answer sits in three places brokers can actually point to: rebuilding costs that have risen independently of the housing market, a run of catastrophe years that pushed insurer losses to twice their 2019 level, and a reinsurance market that repriced by more than 100% before it started easing. None of that is about what the house next door sold for, and framing it that way to a client is both more accurate and, ultimately, an easier conversation to have.
