Home insurance rates across the U.S. are projected to rise significantly in 2025, driven by an array of environmental risks, including natural disasters and severe weather events. As the frequency and intensity of these events increase, states that face the greatest threats are seeing the steepest hikes in premiums.
According to a recent study by Insurify, the national average for homeowner’s insurance premiums is expected to increase by 8%, reaching an average of $3,520 per year.
These rising costs are particularly noticeable in states experiencing more frequent storms, wildfires, and other environmental disasters, as noted by Business Insider.
Rising Risks Lead to Higher Premiums
Natural disasters such as hurricanes, wildfires, tornadoes, and hailstorms have caused significant damage in many areas, prompting insurers to adjust their rates.
In 2024 alone, the U.S. experienced 27 billion-dollar disasters, ranking just below the record 28 disasters in 2023. States like Louisiana, Iowa, and Hawaii are among the hardest hit, with premium increases projected to exceed 17%.
This is a group of states that insurers are catching up to the perceived risk that has accumulated – said Matt Brannon, a data expert at Insurify.
Top States Facing the Largest Insurance Hikes
Here are the nine states where homeowners can expect the largest insurance premium increases in 2025.
1. Louisiana
Louisiana, already known for its hurricane risks, faces the highest projected increase in insurance premiums. With cities like Marrero, Thibodaux, and New Orleans seeing premiums above $17,000, the state is expected to experience a 27% rise in 2025, pushing the average premium to $13,937.
Louisiana‘s premiums are heavily impacted by the ongoing threat of hurricanes, with the state ranking in the top 10 most expensive cities for homeowner’s insurance. The projected increase highlights the significant costs associated with the growing frequency of natural disasters.
2. California
California‘s recent devastating fires, including the January Los Angeles fires, have led to substantial increases in premiums. The state’s projected increase of 21% is largely attributed to the heightened risk of fires, with the average premium rising to $2,930.
Insurance will cost more for customers in California going forward because the risk is greater in California,
State Farm said in a letter, referencing the increasingly severe risk from wildfires and other environmental factors.
3. Iowa
In Iowa, hailstorms have become a significant concern, with major hail events increasing by 80% between 2022 and 2024. Homeowners in Iowa can expect a 19% increase in their insurance premiums, bringing the average to $3,825 in 2025.
Insurance commissioners in multiple states in the Midwest are saying that hail is becoming an increasing problem for home insurers – Brannon explained.
Hail can inflict significant damage on roofs, and roofs are very expensive to get replaced, adding to the rising premiums in states like Iowa.
4. Hawaii
The aftermath of the deadly Maui fires of 2023 has driven up insurance rates in Hawaii. The state’s projected premium increase of 17% brings the average premium for homeowners to $1,808 in 2025.
Hawaii’s increase is mainly driven by the 2023 Maui fire – Brannon noted.
The fires caused significant damage, with the estimated cost of recovery expected to exceed $12 billion.
5. Minnesota
Minnesota is also grappling with worsening hailstorms, which are contributing to increased insurance claims. A 15% increase is expected in the state, raising the average premium to $4,058.
We’re having bigger storms. We’re having these hailstorms that just cause a lot of claims damage – said Grace Arnold, a Minnesota insurance official,
Commenting on the rising severity of weather events.
6. Arkansas
Arkansas, located in a region increasingly affected by tornadoes and ice storms, is seeing its premiums rise by 13%. The average premium in the state will rise to $5,077 in 2025.
7. South Dakota
Like many Midwestern states, South Dakota is facing higher premiums due to hail damage. The state will see a 13% increase, with the average premium for homeowners reaching $4,061.
8. Oregon
While California is more famously known for wildfires, Oregon also experienced significant disasters in 2023. The state is expected to see a 12% rise in premiums, bringing the average premium to $1,807.
In 2023, Oregon faced a record-breaking 1.9 million acres burned, with 40 homes and 132 other structures destroyed, adding to the increased risk perceived by insurers.
9. Colorado
In Colorado, hailstorms are becoming an increasing threat to homeowners. With premiums projected to increase by 11% in 2025, the average annual premium in the state will be $5,984. The state’s roofer, Said Ahmad, shared that in his 18-year career, storms have worsened, with many claims now reaching or exceeding $10,000 in damage.
When I first got into the business, if you had a $10,000 claim, that was considered big. Now, all of them are almost at least that – Ahmad said,
Emphasizing the growing severity of the damage caused by hailstorms.
These increases reflect the growing risks faced by homeowners across the country, with natural disasters continuing to impact both insurers and policyholders alike. As insurers adjust to these changing conditions, homeowners may need to prepare for higher costs in the coming years.
