2025 Extreme Weather Drove Extreme Homeowners Insurance Costs Up by 7.7%
What You Can Do When Severe Weather Pushes Your Premiums Through the Roof
As most U.S. homeowners know, getting insurance can be one of those big annoying necessities when you buy a home. The most important thing home insurance does is protect your home's value from damage due to weather. And if you haven't been noticing the weather lately, you should be worried what it's costing you.
Between 2021 and 2024, most states saw annual premiums for home insurance jump by more than $600. This largely comes from the fact that destructive severe weather events are happening more often. According to NOAA data, of the 403 billion-dollar weather and climate related disaster events in the U.S. since 1980, about 115 occurred since 2020.
- 2023 saw 28 billion-dollar disaster events. Total costs hit $114 billion.
- 2024 had 27 billion-dollar events. Total costs soared over $145 billion.
- 2025 has seen 13 billion-dollar events in just the first 6 months.
For many homeowners, insurance is an alchemy of spreadsheet formulae based on possible perils, future guesses, and (mostly) their monthly payments. But, with climate change costing everyone more to protect their home, it's important for consumers to understand not only what could happen to future rates but also the options they have to keep them affordable.
To help better inform consumers about the weather damage risks they face, we examined reports on the three main severe weather hazard categories to establish how these translate into insurance costs. We then used FEMA Nation Risk Index (NRI) data to create interactive maps to show where these severe weather hazards most often occur as well as their risk and expected annual losses. We then tracked rates for all 50 states from seven on-line insurance shopping services from May, 2025 to September, 2025 to illustrate how these risks translate into real world costs to consumers.
In this way, we hope to show consumers how extreme weather is shifting insurance costs where they live and how to deal with the financial consequences of a changing climate.
Key Findings:
- All states face the same three major weather hazard risks to some degree. But, these hazards tend to concentrate in certain regions. However, only Florida faces all three major weather hazards at the "high" and "very high" risk rating.
- Strong convective storms which include hail, strong winds, and tornados, affect more states and at greater frequency than hurricanes. Recurring storm outbreaks may wreak nearly as much damage over a summer as a single hurricane. In 2023, the U.S. insurance industry reported $60 billion in losses from such storms.
- In recent years, "Tornado Alley", the area where strong convective storms are most common, has shifted eastwards. As a result, more densely populated states now face a greater risk from hail, strong winds, and tornadoes.
- During summer 2025, the average cost for home insurance rose by 7.7% over 2024. While 11 states saw rates fall due to reduced weather risks, 39 states saw rates rise. Of these, 6 saw rates jump by more than 30% likely due to extreme weather such as recurring tornadoes, hail, flooding, and wildfires. West Virginia saw its rates leap by 58% due to multiple hail storms.
Major Weather Hazards Types and Locations
The U.S. Treasury Office's January 2025 report, Analyses of U.S. Homeowners Insurance Markets, 2018-2022: Climate-Related Risks and Other Factors, identifies three major types of weather hazards exerting the most pressure on home insurance rates. These are hurricanes, wildfires, and severe convective storms.
- Hurricane: According to NOAA, a hurricane is a tropical storm system that rotates around a low pressure center. As it intensifies, wind speeds increase to over 73 mph and forms a distinctive eyewall, or cloudless calm spot, in the center. Winds can increase to over 200 mph and the storm can grow to be 60 to 1,000 miles wide.
- Wildfires: While some have human agents, NOAA attributes most wildfires to lightning strikes. Thunderstorms that deposit little rain but produce gusty winds during droughts can both accelerate drying of vegetation and ignite it. Depending on wind and fuel, wildfires can spread rapidly and in extreme cases create their own weather systems.
- Severe Convective Storms: Convective storms are local systems that build using the upward movement of atmospheric heat. Also known as "supercells", these can include strong winds, heavy rain, hail, and tornados. Severe convective storms usually have all of these. Damage can range from blackouts that spoil refrigerated food to flooding, damaged roofs and vehicles to homes pulled off their foundations or totally obliterated. In the mid-west and plains states, big temperature differences during the spring can spin up severe convective storms rapidly so that they spread out in a line to form derechos. These long-lived systems move quickly, between 50 and 70 mph. They can travel as far as 250 miles or more, and drive wind gusts in front of them at 58 mph to 130 mph.
Weather Hazard Areas
It's important to understand where the kinds of weather hazards that homeowners and their insurers face. So, too, is knowing how high the weather risks are and how expensive a catastrophe could be where they live.
The FEMA National Risk Index (NRI) data for March, 2023, rates weather damage risks and loss values for every U.S. county. Using the NRI data, we plotted the kinds of weather hazards associated with hurricanes, wildfires, and severe convective storms for each county in each state.
Obviously, not all counties have the same costs when it comes to damage inflicted by a disaster. The NRI loss amounts reflect the 2023 value amounts within each county for each of the three categories of severe weather.
Hurricanes
Hurricane-associated weather has hit all U.S. states. But, hurricanes inflict the brunt of their fury when they come ashore on southern gulf coast states and east coast states. This can include high water storm surges, heavy rain, strong winds, tornados, and even hail. Heavy rain and flooding can pose a highly dangerous threat as the storm system moves further inland. In 2024, Hurricane Helene weakened to a post tropical cyclone. Heavy rain caused flooding in Georgia which uprooted trees that dislodged pipelines for Atlanta natural gas customers.
Wildfires
Wildfires mostly affect western states where high elevation or vast grasslands and dry conditions help lightning, fuel, and winds come together. However, recurring drought conditions, high heat, and increased risks for storms has spread the risk along the Gulf coast states and up the east coast as well.
Severe Convective Storms: Hail, Strong Winds, and Tornados
Severe convective storms can fire up practically anywhere. However, they mostly form up in states east of Denver, CO, where the right atmospheric conditions come together. Such storm systems can develop strong winds, hail, and tornados. While the NRI rates each of these three hazards separately, they can frequently occur in a severe convective storm.
According to NOAA data, 2025 saw 5,301 severe hail events; "severe" being hail at 1 inch diameter and over. Of these, 790 events saw hail bigger than 2 inches in diameter. FEMA estimates hail alone causes $1.07 billion in damage to vehicles and homes each year with 10 states bearing the brunt, particularly Texas. Hail is especially damaging to thousands of solar panels in the western part of the state that send electricity to Texas utilities.
NOAA data also showed 16,472 severe wind occurrences, the bulk of which happened in the mid west. Strong winds are classified as those that exceed 58 mph (tropical storm winds start at 39 mph). Of these events, 448 saw gusts going over 75 mph, comparable to a Category 1 hurricane. Power outages, downed trees, and roof damage are common.
From January to August 2025, NOAA data shows there have been 1500 tornadoes. Most of these are weak EF0- EF1 and short lived. But, 107 have been rated at EF2 and stronger. Some tornados can grow powerful enough to spin up multiple vortices that rotate around the center, such as the EF4 that destroyed much of Greenfield, Iowa in 2024.
Tornados can typically occur anywhere in the eastern half of the U.S. But, it's important to point out that weather researchers found that the zone long called "Tornado Alley" (Texas, Oklahoma, and Kansas) where the most intense ones form has shifted eastwards into states along the Mississippi. As a result, denser populated areas east of the Mississippi River now face higher risks for expensive tornado damage than they did 20 years ago.
Even grimmer, other areas in the U.S. are seeing increased numbers of tornado events. The "Dixie Alley" which includes eastern Texas and Arkansas, Louisiana, Mississippi, Tennessee, Alabama, and Georgia, now sees more frequent outbreaks. In fact, in 2025, Dixie Alley states suffered the most fatalities from tornadoes; 62 people lost their lives.
How Much Weather Hazard Risks Cost You
According to the National Association of Insurance Commissioners (NAIC), there's about 2,559 property casualty companies and their subsidiaries offering homeowners insurance in the US. While that sounds like plenty, each one has been taking on more customers and more risk while the frequency and fury of severe weather increases.
For example, according to NRI data, Florida has a 30% annual chance of a hurricane coming ashore. In 2023, Miami-Dade County faced $831.70 million in expected annual home insurance losses from hurricane damage alone. Likewise, its neighbor Broward County to the north, $894.8 million. Harris County (Houston) in Texas has a 20% chance but faced $1.145 billion in losses.
Updating those numbers to 2025 using the CPI inflation rate of 6.33%, Miami-Dade County could see annual losses of $884.34 million. Broward County, $951.44 million. And Harris County $1.217 billion. But the populations in all of these areas rose by 2-3%, which adds to the demand for coverage and the overall risk-load to insurance companies. So, it's not surprising that in high-growth places where insurance demand and property values face the highest risks that insurers face big challenges in covering potential losses.
But while other regions get hit by smaller disasters that cost much less than a single hurricane, the frequency of these can see losses in tens of millions of dollars pile up quickly. Omaha alone experiences strong winds, hail, and tornados far more frequently than Miami. For many small, regional insurance companies, serial disasters spread over multiple states during the course of a summer can be too much.
With all these factors in play, the insurance industry faces a cost crisis from both single huge disasters, like hurricanes, and from smaller events that hit the same region, over and over again. For many companies, it is a death by a thousand cuts.
How Insurers Are Raising Your Home Insurance Costs
Insurance companies can turn to reinsurance companies for coverage against major losses. In fact, many small and regional insurers will more often rely on reinsurance coverage. Ironically, they too face the same predicament as their customers: their risk determines how much they must pay to stay insured.
In order to stay in business, insurers are taking harder looks at their risk-loads. In some states, a few companies have refused to renew customers' policies they considered to be too risky. And in some cases, companies have chosen to leave some regions entirely. All the same, no matter where you live, most insurers now see no other way to cut their financial risks than by raising your premiums.
2025 Average Summer Cost of Home Insurance By State
Annual average premium to cover a $300,000 home.
| State | 2024 BankingRate.com Average annual premium | Summer, 2025 URates Average Rate** | Percent change & 2025 weather note |
|---|---|---|---|
| Alabama * | $3,027 | $3,568 | 17.87% |
| Alaska | $942 | $1,288 | 36.73% |
| Arizona | $2,309 | $2,415 | 4.59% |
| Arkansas | $3,103 | $3,722 | 19.95% |
| California | $1,976 | $1,727 | -12.60% |
| Colorado | $3,413 | $4,174 | 22.30% |
| Connecticut * | $1,668 | $2,061 | 23.56% |
| Delaware * | $964 | $1,175 | 21.89% |
| District of Columbia | $0 | $1,116 | |
| Florida * | $5,735 | $5,505 | -4.01% |
| Georgia * | $1,966 | $2,435 | 23.86% |
| Hawaii * | $1,296 | $859 | -33.72% |
| Idaho | $1,392 | $1,697 | 21.91% |
| Illinois | $2,174 | $2,636 | 21.25% |
| Indiana | $1,756 | $2,397 | 36.50% |
| Iowa | $2,362 | $2,502 | 5.93% |
| Kansas | $4,415 | $4,157 | -5.84% |
| Kentucky | $3,501 | $2,953 | -15.65% |
| Louisiana * | $6,274 | $5,100 | -18.71% |
| Maine * | $1,223 | $1,338 | 9.40% |
| Maryland * | $1,685 | $1,920 | 13.95% |
| Massachusetts * | $1,698 | $1,867 | 9.95% |
| Michigan | $2,351 | $2,295 | -2.38% |
| Minnesota | $2,860 | $2,711 | -5.21% |
| Mississippi * | $3,468 | $3,937 | 13.52% |
| Missouri | $2,441 | $2,978 | 22.00% |
| Montana | $2,797 | $3,020 | 7.97% |
| Nebraska | $6,425 | $5,168 | -19.56% |
| Nevada | $1,074 | $1,313 | 22.25% |
| New Hampshire | $1,036 | $1,265 | 22.10% |
| New Jersey * | $1,206 | $1,405 | 16.50% |
| New Mexico | $2,222 | $2,444 | 9.99% |
| New York * | $1,868 | $1,894 | 1.39% |
| North Carolina * | $2,699 | $2,621 | -2.89% |
| North Dakota | $2,805 | $2,854 | 1.75% |
| Ohio | $1,406 | $1,798 | 27.88% |
| Oklahoma | $4,623 | $5,753 | 24.44% |
| Oregon | $1,066 | $1,362 | 27.77% |
| Pennsylvania * | $1,247 | $1,632 | 30.87% |
| Rhode Island * | $2,349 | $2,178 | -7.28% |
| South Carolina * | $2,562 | $2,651 | 3.47% |
| South Dakota | $3,132 | $3,192 | 1.92% |
| Tennessee | $2,534 | $2,871 | 13.30% |
| Texas * | $4,078 | $4,168 | 2.21% |
| Utah | $1,290 | $1,483 | 14.96% |
| Vermont | $834 | $1,126 | 35.01% |
| Virginia * | $1,673 | $1,916 | 14.52% |
| Washington | $1,517 | $1,576 | 3.89% |
| West Virginia | $1,040 | $1,647 | 58.37% |
| Wisconsin | $1,285 | $1,502 | 16.89% |
| Wyoming | $1,306 | $1,799 | 37.75% |
| National Average Rate | $2,315 | $2,494 | 7.72% |
States with * have hurricane deductibles; usually 2% to 5% of home's insured value.
** Based on amounts cited by 7 top online insurance shopping services from May to September, 2025.
Because weather is exerting such a significant influence on insurance costs, the insurance industry pays a lot more attention to forecasts. As a result, the average annual cost for home owners insurance in 2025 rose above 2024's average by 7.72% to $2,494.00.
But, there are things you can do to reduce your risk of paying higher premiums.
States Where Average Cost Fell
Against the odds, 11 states had rates go down by 5% to 20% by August, 2025.
- Hawaii fell by a whopping 33.72%, likely due in part to the result of Lahaina fire. Both residents and governing officials are now much more aware of the danger and working on ways to prevent it from happening again.
- California, too, which suffered record wildfire damage to Los Angeles in January, saw premiums fall by 12.6%. One likely reason for the decrease is that there's now less fuel for future fires.
Similarly, while NOAA and others predicted an active hurricane season in 2025, the threat did not materialize.
- Florida saw rates FALL by about 5%. ??" reforms by the state to get costs under control have helped.
- Louisiana went down by 18.71%
Other states that suffered less damage from bouts of severe convective storms by the end of August also saw their average costs go lower than what they were in 2024.
- Kansas - 5.84%
- Kentucky -15.65%
- Michigan - 2.38%
- Minnesota - 5.21%
- Nebraska - 19.56%
- North Carolina - 2.89%
- Rhode Island -7.28%
States Where Average Costs Rose
Unfortunately, the majority of states saw their average insurance premiums rise over their 2024 price from 1.92% to over 58%.
- South Dakota saw the lowest rise by only 1.92%.
- Texas saw rates rise by only 2.21% in spite of an active tornado season.
- Iowa rose by 5.93%. While tornadoes fell from 131 in 2024 to just 36 in 2025, the state spawned a derecho in July.
- Mississippi rates rose by 13% -- this may be likely due in part to problems in state programs to help home owners qualify and pay for insurance.
The big increases were in those states facing cumulative seasonal damage from strong convective storms containing hail, tornadoes, and intense rain resulting in flash flooding.
Alaska, Indiana, Pennsylvania, Vermont, & Wyoming ??" all saw rates rise by over 30%. Both Alaska and Wyoming also had busy wildfire seasons. Wyoming has had over 1300.
- West Virginia fared the worst with rates leaping up by 58.37% due to flash flooding, strong storms, multiple hail storms during summer, 2025.
Ways to Reduce Your Insurance Costs
Fortunately, there are things you can do to reduce your risk of paying higher premiums.
Shop Policies Carefully
Firstly, when shopping insurers, it's critical to compare policies carefully. When damage is caused by a covered peril such as wind, hail, or fire, a typical homeowner's insurance will pay for the cost to repair or replace your home up to the policy limits. But due to risk loads, insurers have been getting more granular with pricing coverage for different parts of your house. For example, some companies may charge more to cover a home with an older roof. Also look out for repair coverages that use the actual cash value as they can cost you more.
Bundle Your Home and Car Policies
Some insurance companies offer discounts ranging from 5 to 25 percent off when consumers buy two or more policies. All the same, the trick to saving the most money is to compare costs and coverages between insurers to get the best deal.
Raise Your Deductible
Most homeowners know they can save more on their premiums by raising the deductible. In other words, you take on more of the risk of paying more for repairs. Many insurers have been raising policy deductibles. But, if you're willing to take the risk of paying even more yourself if your home gets damaged, then you can cut your annual premium from 12-25%.
Don't File a Claim for Something You Can Cover
The key to having insurance is to know when to file a claim. This is significant because filing a claim with your insurer can lead to an increase in perceived risk and thus increase your annual premium. So, covering the cost to fix or replace minor things yourself can wind up saving you money. Save the insurance for the really big stuff.
When it comes to deductibles, the same advice applies. For example, let's say a tree branch falls in a storm and takes out 20' feet of your home's rain gutter and fascia board. That's about $950 worth of damage in parts and labor. If your policy's deductible requires you to cover the first $1,000, you would have to cover that damage cost yourself anyway. So why file a claim? Again, covering that cost yourself helps you save on annual premium costs.
Strengthen Your Home's Disaster Resistance
Because insurers are tightening their policy language and coverages, hardening your home's structure can definitely help reduce all those coverage costs. However, because discounts are up to insurers and may not be available in all states, it's wise to check with your agent first.
Install Class 4 Weather Resistant Roofing
While not impervious to damage, this type of roofing can take the impact of a 2 inch diameter steel ball dropped on them from twice from 20 feet above. These include polymer-based shingles, styrene-butadiene-styrene (SBS) based shingles, synthetic composite shingles, metal roofing, and slate tiles. These offer long life and durability, and an insurance discount running about 33%. Installation costs run higher than standard 30 year warrantied asphalt shingles.
Install Hurricane Ties
Hurricane ties (aka clips or straps) are galvanized steel connecting straps that help keep your home's rafters secured to the walls of your house so that high winds don't peel it away during a storm. After Hurricane Andrew in 1992, Florida revised its building code so that all homes built after March 1, 2002 are required to have these straps. Because high winds can occur anywhere, installing these straps can help reduce your premiums from 20 to 50%. But, because of house age and construction methods, installing them correctly can be expensive.
Look For State Programs to Strengthen Homes
The Insurance Institute for Business & Home Safety (IBHS) developed FORTIFIED construction methods to help protect homes against severe weather. States joining the FORTIFIED, like Alabama, Florida, and North Carolina, offer grants and insurance discounts to help homeowners retrofit and strengthen their roofs, windows, and doors.
Modernize and Update Your Home's Heating, Plumbing and Electrical
Older homes with old heating, plumbing and electrical systems carry higher risks for fire and water damage or lightning surge damage to electronics. Updating them to modern, efficient ones increases their safety and reliability.
Upgrade Your Home Security
Adding deadbolts, smoke detectors, security lights, cameras, and alarm systems can reduce your annual premium costs by 5 to 20 percent. While many of these are not cheap, they add more security and reduce risk.
Improve Your Credit Rating
Even when it comes to the customers themselves, insurers are all about risks. For that reason, they are increasingly relying on credit information to set premiums. The easiest way to keep your credit score high is to pay your bills on time, avoid carrying credit balances you can't afford, and only keep as much credit as you need.
Methodology
Starting with the U.S. Treasury Office Federal Insurance Office (FIO) report on climate-related risks, we examined reports on the three main severe weather hazard categories to establish how these translate into costs. We then used FEMA Nation Risk Index (NRI) data to show consumers where these severe weather hazards most often occur as well as their risk and expected annual losses.
Sources
U.S. Treasury Federal Insurance Office: Analyses of U.S. Homeowners Insurance Markets, 2018-2022: Climate-Related Risks and Other Factors
https://home.treasury.gov/system/files/311/Analyses_of_US_Homeowners_Insurance_Markets_2018-2022_Climate-Related_Risks_and_Other_Factors_0.pdf
Note: at present, this report is not available from the U.S. Treasury website. It is available via the Internet Archive:
https://archive.org/details/analyses-of-us-homeowners-insurance-markets-2018-2022-climate-related-risks-and-other-factors-0
NOAA: Billion-Dollar Weather and Climate Disasters
https://www.ncei.noaa.gov/access/billions/mapping
NOAA: Storm Prediction Center, Storm Reports
https://www.spc.noaa.gov/climo/
FEMA: National Risk Index (NRI)
https://hazards.fema.gov/nri/
Gallagher Re: Natural Catastrophe and Climate Report
https://www.ajg.com/gallagherre/-/media/files/gallagher/gallagherre/news-and-insights/2025/july/h1-2025-natural-catastrophe-and-climate-report.pdf
National Association of Insurance Commissioners
https://content.naic.org/cis_consumer_information.htm
Insurance Institute for Business & Home Safety
https://fortifiedhome.org