What to Do When Your Homeowner’s Insurance Rate Increase

Increased severity of claims

Insurers aren’t just dealing with more claims. They’re also paying more to cover each one.

“When a claim does happen, the cost to either repair or reconstruct a home has gone through the roof,” Wadley explains, “and insurers are paying much larger claim amounts than for the same thing, say, two years ago. Well, insurers don’t just eat those costs. They pass those on to the consumer.”

And, as we’ll see, these increased costs aren’t just in the past. Not only do insurance companies need to make up for their recent losses, but they now need to increase prices to account for the fact that future losses will be more expensive too. Let’s look at the factors that are affecting these repair-rebuild costs.

Increased costs to rebuild and repair homes

When a home is damaged, insurers have to account for what it will cost to get that house back to its pre-loss condition, and those costs have been climbing. Here are some of the factors pushing reconstruction and repair costs higher:

• Inflation: Everyday costs are still rising, which can feed into the price of materials, transportation, equipment, and other expenses involved in rebuilding. As of August 2026, U.S. consumer prices were up 3.4% from a year earlier.
• Higher construction material costs: Building materials have gotten more expensive, and the increases haven’t fully gone away. Construction input prices were up 8.9% year over year in August 2026.
• Rising labor costs: Rebuilding a home takes skilled workers, and their wages can add significantly to the final bill. BLS data shows wages for construction (along with extraction, farming, fishing, and forestry) occupations were up 3.9% over the year ending in June 2026.
• Skilled labor shortages: Finding enough workers to handle construction and repairs can be another challenge. The industry needs to attract about 349,000 net new workers in 2026 to meet demand, which can put additional pressure on labor costs.
• Supply chain and transportation costs: Getting materials where they need to go can also affect what insurers ultimately pay for repairs. Fluctuations in fuel and other input costs can ripple through the construction process, and construction input prices rose 1.2% in August 2026 alone.

Those higher costs can reach your premium

In short, when insurers face more expensive claims and higher costs to repair or rebuild homes, they have to account for those expenses somehow. Severe weather, pricier building materials, rising labor costs, and worker shortages can all make a covered loss more costly than it used to be. Over time, those higher costs can show up in the premiums homeowners pay.

What individual factors can increase your home insurance rates?

Aside from these broader trends mentioned above, there may also be factors specific to your home that can push your insurance rate higher. If you’re shopping for a new home, remember that those same factors can affect how much you’ll pay to insure the property.

Your home and its systems are aging

Older homes and outdated systems can be a bigger risk for insurers. “As things begin to age, especially homes, wear and tear over time means that you’re more likely to have a pipe burst,” explains Wadley.

“The older your roof becomes, when that small hail storm comes through, it’s much more likely to actually have a claim filed against it because of damage. And so as the home ages, the premiums will absolutely rise.”

Your insurance score went down

Similar to a FICO credit score, insurers calculate a credit-based insurance (CBI) score to help set your rates. Although the way the score is calculated can vary between carriers, in general, companies will be interested in factors like:

• Your claims history
• Your total debt load
• Your credit score
• Any missed or late payments

Negative movement in any of the above categories can result in an increased premium.

You made changes to the property

If you’ve added to your home or taken on a major remodel, your insurance rate may go up because the property is now worth more to rebuild or replace. A new addition, upgraded kitchen, or finished basement can all increase the amount of coverage you need.

That doesn’t necessarily mean your premium will skyrocket, but it’s worth letting your insurer know about these major improvements. That way, you won’t be caught off guard if you ever need to file a claim and discover your policy doesn’t fully cover the updates.

You added “attractive nuisances” liability

Attractive nuisances are things on your property that might draw kids in and put them at risk of getting hurt, potentially leaving you — and your insurer — on the hook for the damages. This increased risk means increased premiums for you.

Examples of attractive nuisances may include:

• Swimming pool
• Hot tub
• Trampoline
• Pets

Wadley notes that while a trampoline may only result in a small rate increase, say, $25 on a $2,500 policy over the course of a year, a pool will have a much greater effect, since it poses more risk.

Do I really have to tell my insurance company about attractive nuisances?

“So people love to try to say no, we don’t have one,” warns Wadley. However, “If you have one, you definitely need to let them know,” he cautions.

According to Wadley, many insurers periodically inspect the outside of properties to make sure homes are being properly maintained. During one of these inspections, they may spot an attractive nuisance you didn’t disclose to them. And if you haven’t told the company about it, don’t expect any claim related to it to be covered.

Your home is in a risky location

As mentioned above, insurers will sometimes decide that a particular location or zip code carries more risk than they’d like, even if the company viewed it as less risky when you first took out your policy. If your home is in such a location, an insurer can choose not to renew your coverage or raise your rate.

Some negative factors related to location could include:

• Likelihood of extreme weather events
• Likelihood of natural disasters
• High crime
• Flood zones
• Fire lines

Unfortunately, you simply cannot change these factors about a home you already own. If you’re house-hunting, however, you’ll want to keep these things in mind before signing papers and claiming keys.

“I would tell anyone shopping to be very well aware of the area that they’re looking in,” says Lemmon. In California and Florida especially, he notes, it’s easy for homebuyers to see what appears to be a very nice home and want to jump at the chance to purchase it. But if the property is in or near the hills in California or in a flood zone in Florida, it may be practically uninsurable.

Or if you were lucky enough to find a carrier in a flood zone, he adds, “What a lot of new homebuyers wouldn’t know is that it could [raise] your monthly payment by $1,000 a month — insuring it for flood.”

States where home insurance rates are rising the most

Home insurance costs haven’t gone up at the same pace everywhere. Some states have seen much steeper increases over the past few years, while others have had more modest changes.

Top 5 ways to reduce the impact of rising homeowners insurance rates

So, what can you do to keep rising homeowners insurance costs in check? The experts we spoke with shared a few options that could help, depending on your situation.

1. Increase your deductible

Gutterman’s number one recommendation for reducing your homeowners rate is to opt for a higher deductible.

While most companies will show you a quote for a policy with a $1,000 deductible, he says, “Lower deductibles tend to be overpriced.” So, Gutterman recommends asking how much you would save by going up to a $2,500 or even a $5,000 deductible, which is often a 10% savings for $2,500 and may be as much as 20 to 25% with a $5,000 deductible.

Yes, he admits, you’re accepting more risk. So, if you’re a homeowner who tends to file a claim every year (not recommended, by the way), a higher deductible won’t work in your favor. For the typical homeowner, however, “the average claim is about once every sixteen years.” And roughly “half of people have no claims over ten years.”

The caveat: this only works if you can afford to pay that higher deductible if a claim does arise.

Gutterman also recommends setting aside those savings from the premium in case a claim eventually does arise. By doing so, the average homeowner may very well save enough to completely cover the deductible.

2. Shop around, but don’t just take the lowest quote

While you might think shopping around would be your biggest way to save money, Gutterman cautions that may not be so. “Most of the time,” he warns, “if you’re getting a better rate from one company than the other, it’s probably because you’ve taken less coverage, and there’s a good chance you don’t realize that.”

Shopping around is still a good idea, as long as you don’t assume that cheaper insurance is always the better fit.

Similarly, Wadley cautions, “The big thing, the big gotcha that’s out there in the marketplace right now, that especially those first-time homebuyers really need to be aware of — just because something is cheaper doesn’t mean it’s good for you.”

So it’s crucial to evaluate a policy thoroughly and compare different quotes and policies in detail, side-by-side. If this feels overwhelming, you might consider working with an independent agent who can help you compare policies from a few different companies prior to making a choice.

3. Bundle coverage for discounts

It’s simple: many carriers will offer discounts when you purchase more than one policy from them, such as home and auto or for multiple policies if you have more than one home, for instance. So be sure to explore your potential savings from using the same carrier for more than one product.

4. Ask for every applicable discount

In addition to bundling, many carriers offer a variety of discounts. “Are you a veteran? You’re due a discount,” Orefice says. “Do you own more than one property and qualify for a multi-policy discount? Go over the list of discounts your carrier offers to make sure you’re ticking off all the boxes that apply!”

Here are some other possible discount categories you may want to ask about:

• Preventative measures discounts (or home safety discount)
• Smart home technology discount
• Protective devices or security system discount
• Loyalty discount or customer retention program
• Senior citizens discount
• Claim-free discount
• Roof discount
• First-time homebuyer discount

5. Reduce or cancel any coverage you don’t need

You’ll want to review your coverage to make sure you’re covering everything you need to and nothing you don’t. However, don’t skimp on essentials like:

• Personal liability coverage: This protection is needed in case someone is injured while on your property.
• Fully insuring your home: The best policies will cover your home’s replacement cost, not just actual cash value. While you can quickly get a ballpark value estimate for your home with a free tool like HomeLight’s Home Value Estimator, that number will likely be different from what it would cost to rebuild your home if it were destroyed.
• Categories of crucial importance: What’s considered crucial can vary in your specific geographical region. For example, Wadley names five aspects of protection he says are essential for what he calls “True Texas Home Insurance”:
  • Full replacement cost on the home, including cost overrun protection
  • The lowest wind-hail deductible available in your marketplace
  • Full replacement coverage for your roof
  • Enhanced water coverage that includes slow leak and sewer backup
  • Max liability to make problems go away if they arise (since this only costs pennies a day)

Questions about types of coverage? Read more on what a home insurance policy typically covers.

»Learn more: Don’t forget to factor homeowners insurance into your homebuying budget, since it can add a significant amount to your monthly housing costs. Use HomeLight’s Home Affordability Calculator to see what you can comfortably afford with those ongoing expenses in mind.

Additional tips for reducing homeowners insurance costs

Orefice offers a list of additional ways you might save, some more beneficial to you than others:

Raise your credit score: “Take some time to pay off debts and pay your bills on time,” he suggests. “In six months to a year, check in with your insurance agent because you may be eligible for a lower home insurance rate.”

Relocate to a safer location: If crime is an issue, move to a safer neighborhood.

Fortify your home: Ask your insurer what you can do to make your home more disaster-resistant, says Orefice. This will reduce the likelihood of claims. Possible upgrades could include:

• Installing or upgrading storm shutters
• Reinforcing your roof
• Modernizing your heating
• Modernizing your plumbing
• Modernizing your electrical systems
• Ensuring your home is properly bolted to the foundation

Get rid of higher-risk items: Remove trampolines, pools, and playground sets. If you want to keep them, consider adding secure fencing.

Quit smoking: Orefice makes this recommendation because it’s better for your health, of course, but also because insurers may raise prices for smokers, who are more likely to start a house fire than non-smokers.

Lower your coverage limits: Reducing coverage will lower your rate, but Orefice cautions that you should do this only as a last resort because, otherwise, you may be left underinsured.

Key takeaways

Whether you’re staring at a higher insurance bill or you’re a hopeful homebuyer wondering if you can afford the premiums, you hopefully now have a better idea of why homeowners insurance rates are going up and what you can do to keep costs in check. Here are some key points to remember:

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