The rapid acceleration of home insurance costs may be approaching an inflection point after growth cooled considerably last year, according to a new report from Rate Cos.
The average premium increased 9.2% in 2025, rising to $2,205 from $2,020 the prior year, with moderation resulting in the slowest growth pace since 2020. Last year's rate came in at less than half of 2024's 20% clip, while in 2023,
"After several years of sharp increases, we're starting to see early signs that the market is stabilizing," said Rate Insurance President Jeff Wingate in a press release.
"Premiums are still elevated, but this shift gives homeowners a window to reassess their coverage, make informed adjustments and take a more proactive approach to managing long-term costs and their overall financial well-being."
Still, the average premium today is more than double, or 107.6% higher, from where it stood in 2019. At the same time, Coverage A, which supports rebuilding costs following a claim, rose by only 45.6% over the six-year period, pointing to the wide gap that now exists between what homeowners pay and the protection they receive.
Replacement costs averaged $478,000 in 2025, also outpacing the automatic Coverage A adjustments most policies regularly see.
Submitted claims at Rate in 2025 decreased to a five-year low, falling 25.5% to 1,045 records from 1,403 on an annual basis. While claim volume dropped, losses covered remained near the previous year's level, inching down only to $34.1 million from $34.6 million in 2024, with the insurance marketplace pointing to a rise in incident severity, particularly in regard to
The report's findings come from analysis of approximately 265,000 policy records data from all 50 states, which was conducted by the insurance affiliate of the mortgage lending giant Rate. Claims data goes as far back as 2018.
Trends across the country
Multiple studies attribute the
Annual home insurance growth shows wide variation across the country, though, and even fell in two states. Maine homeowners saw the biggest jump in their burdens, with the average premium up by 21.4%. It was followed by Nebraska and North Dakota at 19.6% and 18.3%, respectively.
On the opposite end, the mean cost of premiums fell by 1.6% and 0.5% in West Virginia and Louisiana. While still rising, rates of growth moderated significantly for Iowa and Florida residents, heading up by 1.6% and 4.4%, Rate Insurance reported.
Homeowners in Colorado face the highest average premium in the U.S. at $3,392, with Texas not far behind at $3,343. Although home insurance is the priciest in those states, growth slowed significantly in both last year after surging by more than 20% in 2024 and 2023.
Filling out the top five were Oklahoma, South Dakota and Florida with insurance costs clocking in at $3,135, $3,040 and $2,946.
Meanwhile, District of Columbia property owners had the smallest premiums with a mean of $1,197 in 2025. Vermont and Oregon finished with the next lowest averages, both at $1,394. They were followed by the neighboring states of Utah and Nevada, where homeowners typically paid $1,403 and $1,449.
