Homeowners across the U.S. may face a sharp increase in insurance premiums over the next two years, with experts projecting a 16% rise driven by natural disasters and higher rebuilding costs.
According to FOX Business, real estate analytics firm Cotality estimates that average homeowner premiums will climb 8% in 2026, followed by another 8% in 2027.
“These premiums have been rising dramatically over the last few years, with some areas seeing double-digit growth,” said John Rogers, Cotality’s chief data and analytics officer.
He noted that insurance now accounts for 9% of the typical U.S. homeowner’s monthly payment—the highest proportion ever recorded when factoring in principal, interest, property taxes, and insurance.
Danielle Hale, chief economist at Realtor.com, told FOX Business that the growing cost of rebuilding, fueled by both general inflation and housing supply-chain pressures, is driving insurance rates higher.
She also highlighted that “more frequent disasters have resulted in more damage and increasing claims, trends insurers are trying to get ahead of.”
Research from Realtor.com underscores the scale of the risk. A significant portion of U.S. housing faces severe or extreme climate threats, with 6% at risk of flooding, 18% at risk of wind damage, and another 6% vulnerable to wildfires. Trillions of dollars in real estate are exposed, particularly in coastal markets.
The Miami–Fort Lauderdale–West Palm Beach area tops the list, with $306.8 billion in home value—23.2% of the region’s total housing—threatened by severe flood risk.
Hannah Jones, senior economic research analyst at Realtor.com, warned that rising insurance costs could further strain the housing market.
“An unexpected increase in the cost of homeowners’ insurance can catch existing homeowners off guard and discourage potential buyers who are trying to estimate their monthly housing expenses,” she said.
Jones added that higher premiums may weaken buyer demand and destabilize housing markets already challenged by affordability issues.
With high interest rates and rising home prices keeping many prospective buyers sidelined, the added burden of soaring insurance could make homeownership even less attainable in vulnerable areas.
As climate risks intensify and construction costs climb, homeowners may need to prepare for a future where insurance expenses are an increasingly significant part of monthly budgets.
