Why Did My Homeowners Insurance Go Up In 2025?

If you've been wondering, "Why did my homeowners insurance go up in 2025?" you're not alone. Questioning insurance rate increases, especially in recent years, is common. The reasons why homeowners insurance goes up are multifaceted. In this guide, we'll break down several of the biggest factors influencing home insurance rate increases, including inflation, labor shortages, an increase in severe weather, and more.

Fortunately, an independent insurance agent in your area can help you find affordable home insurance, regardless of recent rate increases. They'll help you find the cheapest quotes and the discounts that can help reduce your premiums even further. But first, here's a closer look at what affects homeowners insurance premiums and why they've been increasing this year.

Has Homeowners Insurance Gone Up In 2025?

The current average cost of home insurance is $2,110 a year for $300,000 in dwelling coverage. For those asking, "Has homeowners insurance gone up in 2025?" the answer is yes. In fact, home insurance has increased by an average of 21% across the U.S. in the last couple of years. That also translates to an average increase of $244 annually for those who have experienced these rate hikes. 

While there may be specific reasons your personal policy has gone up in price, such as due to filing a claim or adding more coverages, this doesn't apply to everyone. Unfortunately, several factors that have nothing to do with your personal claims history, coverage, or even the home you live in have contributed to home insurance premiums increasing across the map. We'll explore these in detail next.

5 Reasons Why Your Homeowners Insurance Went Up in 2025

A few major factors have impacted home insurance premiums for many policyholders in the U.S. Here are five of the biggest factors to consider.

1. Increase in severe weather and natural disasters

Incidents of hurricanes and wildfires, among other types of natural disasters, have also been increasing in recent years. Particularly, hurricanes that impacted Florida and North Carolina were noteworthy in 2024, as were the wildfires in California in early 2025. Extremely cold weather in Texas and severe tornadoes across the central U.S. also caused huge property losses for homeowners and financial losses for homeowners insurance companies. In fact, there were at least 20 billion-dollar natural disasters in the nation last year. The average number of billion-dollar disasters in the last few years has risen to 20.4, while this average was just 8.5 annual events from 1980 to 2023. 

Global warming and other climate change factors impact the increase in severe weather incidents. Homeowners insurance companies must continue to increase their annual premium rates as climate change worsens to reduce their risk of bankruptcy from paying out more frequent and more expensive property damage claims. This increased cost obviously falls to policyholders, and not just the ones who live on the coast. Homeowners across the country experience more expensive premiums, as intense natural disasters are impacting more areas than ever before.

Home insurance includes dwelling coverage and contents coverage for your home and personal property against damage and destruction from windstorms, hail, lightning strikes, and fire. Some of these coverages can vary depending on where you live, however. But in most policies that include these coverages, the cost of premiums must increase to compensate for the newly heightened risk of natural disasters and related damage and destruction to homes.

2. Some home insurance companies have stopped writing coverage in high-risk areas

As natural disasters worsen and become more frequent, some home insurance companies just aren't willing to continue writing policies in the states that are deemed high-risk. This also translates to higher premium rates for policyholders, since there are fewer companies overall that offer coverage, so the existing active companies must utilize stricter underwriting criteria. 

While premium hikes are often reported in the news for states like California and Florida, these aren't the only areas experiencing rate increases. In fact, North Carolina is scheduled to experience a 7.5% average increase in home insurance rates on June 1, 2025, and another 7.5% increase on June 1, 2026.

A few home insurance carriers that have withdrawn or limited their coverage in high-risk states include Safeco, Allstate, Farmers, and State Farm.

3. Labor shortages

The construction industry in the U.S. has been experiencing an extreme skilled labor shortage in the past couple of years. Due to the shortage, supply chain issues and other problems in the construction industry have arisen. These issues directly correlate, at least in part, to the rise in home insurance premiums as well. 

In August of 2024, there were 368,000 construction job openings in the U.S., which was an increase of 138,000 from the previous month. Further, this number was more than double that expected by the U.S. Bureau of Labor Statistics. 

4. Rising material costs and supply chain problems due to inflation

Another answer to "Why did my homeowners insurance go up?" is the rising cost of materials used to construct homes. Even though inflation rates have cooled recently, the cost of rebuilding a home in 2025 is still more expensive than it was just a couple of years ago.

This is largely due to the increase in the price of lumber and other materials used to build a house. Certain home construction materials, such as asphalt and roofing materials, remain much more expensive than they were before the COVID-19 pandemic of 2020. Thus, home insurance rates have had to increase to compensate for the higher potential cost of materials needed to rebuild a home after a covered disaster.

5. You filed a homeowners insurance claim last year

One of the biggest factors that can impact your home insurance premiums is your claims history. Once you file a claim, your insurance company deems you as more of a risk and more expensive to continue insuring. As a result, your premiums often increase. 

You can expect home insurance premiums to go up an average of 7% to 10% after filing just one claim. If you had to file any property damage claims last year, this could be a major factor in why your premiums are more expensive this year. Not every claim will lead to a large increase, but considering your claims history might help you answer, "Why is my homeowners insurance so high?"

Additional Factors Why Homeowners Insurance Rates May Increase

Some factors within your control can contribute to homeowners insurance increases. If you've been asking, "Why did my home insurance go up?" it could be due to one of the following reasons.

You changed your policy

Adding more coverages or increasing your coverage limits can lead to your home insurance premiums increasing overall. But you also might experience rate increases if you change insurers. 

You might also not qualify for certain discounts you used to anymore, such as a bundling discount, if you no longer have another type of policy, such as auto insurance, through the same carrier as your home insurance.

You modified your home

If you've made changes to your home, you can typically expect your home insurance rates to change, too. Perhaps you added an addition like a new deck to your home, changed the plumbing or wiring, or installed another feature. 

Typically, increasing the square footage of your home means increasing your home insurance premiums along with it. Not all modifications or changes to your home will lead to rate hikes, however, as updating certain features, like the plumbing or roof, can actually lead to savings. 

Your insurance score dropped

Insurance companies calculate your insurance score to determine your specific risk of filing a claim within a given coverage period. A big factor that plays into your insurance score is your credit score and credit history. If your credit score has decreased over the past year, it may cause an increase in the premiums for a couple of different insurance policies you have, including home insurance and auto insurance.

Your liability risk increased

Certain additions to your home can actually increase your liability risk. This can include changes like adding a trampoline, swimming pool, or even a dog to your residence. Since home insurance includes liability coverage, if your risk increases, you can expect your policy's premiums to increase, too.

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How to Reduce Homeowners Insurance Costs

Fortunately, there are a few fairly simple steps you can take to help lower your home insurance costs. See which of these options you can act on today to start saving on your coverage.

Increase your deductible

Increasing your home insurance deductible means you'd have to pay more out of your own pocket each time you file a claim. However, a higher deductible amount also comes with a clear benefit: a lower policy premium. 

You'll need to weigh your options when considering if you want to increase your deductible. Review your savings and financial status to determine how much you could pay out-of-pocket if you had to file a claim before deciding to increase your deductible.

Bundle your coverage

Most home insurance companies offer bundling discounts. The way to earn them is simple: you buy more than one type of policy through the same carrier. Many policyholders bundle their home insurance and auto insurance with the same insurer to enjoy hefty discounts on both policies. 

Ask about discounts

Most home insurance companies offer several types of home insurance discounts, not just for bundling. You might be able to earn more discounts than you currently are, such as veteran discounts, loyalty discounts, group discounts, claims-free discounts, paid-in-full discounts, and more. If you haven't already asked your insurer about all the discounts you could be earning, give them a call today.

Work with an independent insurance agent

Independent insurance agents can actually take all of the above steps for you to make things easy. They shop and compare policies from multiple carriers in your area for you to find the best overall blend of coverage and cost. 

They also automatically scout for any discounts you might qualify for to increase your savings even further. But your independent insurance agent can also be a trusted advisor by offering expert insight on whether raising your deductible is worth the premium savings. Even better still, your agent will be there throughout the life of your policy and can file claims for you.