It's been a rough ride for home insurance customers.
This summer, major insurer Allstate announced an average 34% rate hike in California, while State Farm was approved for a similar rate increase.
With major turmoil in insurance markets, thousands of homeowners are seeing their premiums skyrocket, while other households are simply being dropped from policies -- even as they've become increasingly vulnerable to climate-related factors like wildfires and hurricanes.
More frequent and extreme weather events have contributed to jacked-up operating and infrastructure costs for insurance companies, particularly in coastal areas like Florida and historically low-risk states.
"Insurers pass these costs to the consumer by increasing premiums to cover losses and expenses," says Shiloh Elliott, press secretary for the Florida Office of Insurance Regulation.
Nationally, home insurance rates went up 11.3% in 2023, according to S&P Global, and are continuing to rise this year.
Though homeowners are left scrambling to protect their single biggest asset, they aren't powerless. Experts say there are still ways to lower your insurance costs and mitigate the impact of high rates.
Why are home insurance rates going up right now?
Inflation is a factor in the steep increases in home insurance rates. As construction materials and labor costs go up, repairing and rebuilding properties becomes more expensive. Insurers say they're paying out more in claims than they've received in premiums and can't cover the rising costs of replacing a house or a roof after it's damaged in the next storm.
And speaking of storms: The US has seen a record number of hurricanes and wildfires in recent years. "All those are creating some pretty significant losses" for insurers who have to pay out claims, says Jon Godfread, North Dakota insurance commissioner and president-elect of the National Association of Insurance Commissioners.
Godfread says that while insurance companies keep extra reserves to cover catastrophic losses, they'll eventually raise rates to compensate for the large payouts to homeowners in an attempt to restore profitability.
What areas of the country are seeing the greatest spikes?
States like California and Florida, with high concentrations of intense wildfires and hurricanes, respectively, are seeing some of the biggest spikes, with some insurance companies raising premiums by 50% or more. The situation is so dire that a handful of insurers have entirely withdrawn from the market in certain states, citing disaster risks.
Insurance companies spread risk across a large national marketplace, so premiums from less-disaster-prone states subsidize payouts in higher-risk areas. That means even households in states like North Dakota, which doesn't experience many major storms, are seeing their rates rise to compensate for greater risks elsewhere, according to Godfread.
Read more: Zillow Real-Estate Listings Are Adding Climate-Risk Data
How to reduce your home insurance premiums
There are a few ways you can hedge against rising premiums or at least get a better deal. Here's what the experts recommend:
✔️ Shop around
Many homeowners habitually stay with one insurance company for the long haul and grit their teeth through premium hikes. But don't be afraid to talk to different companies and agents. You're likely to see a range of prices for the same coverage and might be able to save money by switching insurance carriers.
Godfread encourages homeowners to explore new coverage options and get several quotes. You might also look beyond what your insurance broker can offer, since many brokers only have access to a small portion of the market, Godfread says.
✔️ Look for discounts
Always look for a "bundling" discount. If you use the same insurance company for homeowners and auto coverage, you can sometimes unlock a discount on your premium, Godfread says.
Your insurance plan might also contain other lesser-known discounts. Ask the company or your insurance broker if there are any rebates you might qualify for.
✔️ Consider increasing your deductible
With any type of insurance, the lower your deductible, the higher your monthly premium. (Your deductible is how much you must pay before your insurance kicks in and starts paying out. So if you have a $1,000 deductible, you'll have to pay that amount before insurance covers the rest.)
But that works both ways: You can increase your out-of-pocket deductible to lower your premium. If you raise your deductible to $5,000, for example, you'll pay less on your monthly bill. Just make sure you have $5,000 in cash on hand in case of an emergency to cover home repairs before your insurance goes into effect.
✔️ Don't neglect home maintenance
One overlooked way to help with home insurance costs is to maintain your home to reduce the risk of damage. If you live in a wildfire-prone area, you might clear away debris that could catch fire. Or if you're in the path of hurricanes, you could consider trimming tree branches that might fall on your house during a storm.
While insurers typically don't offer discounts for these types of mitigation efforts, some insurers may offer rewards for certain home improvements or upgrades.
✔️ Tap your state's resources
Every state has a department that works on home insurance issues and regulates the industry. These agencies can also provide a wealth of resources for consumers. Godfread says you can call for free, unbiased advice to help you understand your coverage or your options for something new.
Never go without insurance
Looking for cheaper options to protect your property can take time and effort. But as tempting as it is to cut home insurance entirely, you won't want to foot the bill when disaster hits.
If you live in an area prone to wildfires, floods, hurricanes or other natural disasters, an insurance company may determine your home too risky or expensive to insure. If you're denied coverage, ask the company to explain why. If the reason is based on something within your control, like weatherproofing your home, you may be able to fix it and apply again.
You can also shop around to find an alternative option. Even if you can't qualify for a standard plan, you may be able to get a modified policy that offers some coverage in the event of an emergency.
Read more: Climate Change Is Making Homeownership More Expensive. Here's How to Weather the Storm