Home Insurance Rate Hikes Are Outpacing Both Inflation and Income Growth

Written by  Jamie Cattanach

Edited by  Becca Stanek

+ 1 More

Published Mar 16, 2026

Homeowners won’t be surprised to learn that home insurance rates have been rising — far faster, in fact, than inflation and income growth in recent years. LendingTree research finds that, from 2020 through 2025, regulator-approved home insurance rates rose 45.8% nationally, compared with a 26.1% inflation rate. That’s a notable 19.7 percentage point gap, or nearly double (about 1.8 times) inflation. 

Below, find the full details, including the states with the widest and narrowest gaps between home insurance rate increases and inflation.

Home insurance rate increases outpace inflation

Regulator-approved home insurance rate hikes outpaced inflation from 2020 through 2025 — and substantially, at that. Across the nation, rate hikes totaled 45.8% over this six-year period, while inflation across the same period totaled 26.1%. That’s a 19.7 percentage point difference, meaning that insurance rate increases outstripped the cumulative inflation rate by 1.8 times.

“This trend has put strains on family budgets across the spectrum,” says Rob Bhatt, LendingTree home insurance expert and licensed insurance agent. While low- and moderate-income families may feel an even tighter pinch since they have less financial cushion, “most people have been affected by this in one way or another,” Bhatt says.

“Homeowners insurance is an essential need,” Bhatt affirms — and if you’re like the majority of homeowners with a mortgage, the lending institution requires it. That means that these rising costs can cut into the funds that families have for other needs, explains Bhatt, including groceries, utilities and the cost of the mortgage payment itself.

Increases have been bigger recently, but they may be stabilizing

The widest annual gaps between home insurance rate hikes and inflation occurred in recent times. The year 2024 saw the widest gap, with homeowners insurance rates increasing 12.5% as inflation was 2.9%, a 9.6 percentage point gap that means insurance rates skyrocketed at around 4.3 times the inflation rate. Meanwhile, 2023 saw home insurance rates spike by 10.7% compared to a 3.4% inflation rate, a 7.3 percentage point gap, meaning home insurance hikes outstripped inflation by about 3.1 times. 

In 2025, however, the trend slackened a bit when the rates of regulator-approved homeowners insurance policies rose a relatively low 5.9%. 

Home insurance rate changes vs. inflation, 2020 through 2025

2020

2021

2022

2023

2024

2025

According to Bhatt, a combination of factors has contributed to this intense recent rise. “The first,” he says, “has been an uptick in large-scale natural disasters, including hurricanes, extreme wind events and wildfires.” And because of the way costs are shared across insured parties, disasters can increase prices even in less-prone areas.

“Meanwhile,” Bhatt goes on, “the costs of building materials and labor have also gone up at higher-than-normal paces. Insurance companies have had to repair or rebuild more homes than normal, and the cost of rebuilding each one is more expensive than it was before 2020. Unfortunately, insurance companies raise their rates to account for this type of growth in their expenses.”

There is, however, “one bit of good news,” Bhatt says. “There are signs that home insurance prices may be stabilizing. Inflation has cooled, and prior rate hikes may be giving insurance companies enough revenue to cover their growing claims costs.” 

In this economy, even seeing insurance rates flatten for a few years could provide relief to homeowners, says Bhatt — though another spike in inflation or more extreme weather events could always upset this tenuous balance.

Home insurance rate hikes outpace inflation the most in Colorado

While there’s always significant state-to-state variability in such trends, this one didn’t miss too much of the U.S. Home insurance rate increases exceeded inflation from 2020 through 2025 in 44 U.S. states, as well as the District of Columbia. 

Colorado, however, had the biggest gap. There, home insurance rates — which catapulted upward 100.8% over the six-year studied period — outpaced inflation by 74.4 percentage points. Next up was Iowa, which saw a 69.7 percentage point difference between the two increases, with Minnesota coming in third at 61.9 percentage points. 

At the other end of the spectrum, the five states where inflation outpaced home insurance rate hikes were led by West Virginia, with an 8.7 percentage point difference in the opposite direction. It was followed by Vermont (-2.7 percentage points), Maine (-2.3 percentage points), Alaska (-1.0 percentage points) and New York (-0.5 percentage points).

The algorithms underlying insurance rates are complex, and it can be difficult to ascertain why certain states fared so differently from others in this regard. That said, it’s noteworthy that none of the states where inflation outpaced homeowners insurance rate hikes are in areas typically prone to hurricanes, wildfires and other major, costly weather-related disasters. 

“The New England states haven’t been hit as hard by natural disasters as most other parts of the country, and this may be why home insurance rates have remained stable in Vermont and Maine,” Bhatt says. While West Virginia is close to places that have been hit heavily — namely, western North Carolina, which saw devastating flooding in 2024 during Hurricane Helene — the state itself “escaped the brunt of these events,” Bhatt notes.

Full rankings: Where home insurance rates rose faster than inflation, 2020 through 2025

Full rankings: Where home insurance rates rose faster than inflation, 2025

Home insurance rate changes also outpace income growth

While it’s hard enough for homeowners to keep up as insurance outpaces inflation, in the majority of states, the rising cost of home insurance is also outpacing income growth. (Note: The data for this section is taken from 2020 through 2024, rather than through 2025 like the data used in the sections above.)

During the studied period, in all but nine states, the percentage increase in median household income fell short of the regulator-approved home insurance rate change. The gap was widest in Iowa, where there was a 49.5 percentage point difference between the insurance increase (70.9%) and the median household income bump (21.4%). Utah and Colorado followed, with percentage point differences of 43.8 and 42.8, respectively. 

Obviously, this trend will be duly troubling for many homeowners.

“Ideally, you want your income to grow faster than inflation,” Bhatt explains. “That’s how you get ahead, so to speak, on your finances.”

While in some of these states, income increases may outpace inflation, the insurance rate hikes can still diminish your gains from a salary increase, Bhatt explains.

That said, there are a few states that enjoyed household income growth that outstripped the home insurance rate increases. In Vermont, where household income increased 27.9% between 2020 and 2024 — one of the higher increases across the nation — the percentage point difference was -11.4. South Carolina follows at -9.0, with Maine coming in third at -8.3.

Still, when considering 2024 alone, even more states saw the home insurance increase exceed median income growth — 48 states and the District of Columbia, to be exact. (The exception was Florida, where a 4.0% median household income increase outpaced a 1.1% increase in home insurance prices, a percentage point difference of -2.9.) 

The states that saw the worst single-year discrepancies here were Iowa (where home insurance rose 27.1% in 2024 compared to just a 2.6% income increase), followed by Nebraska (a 20.6 percentage point gap) and Minnesota (20.5 percentage points).

Full rankings: Where home insurance rate changes outpaced median household income growth, 2020 through 2024

Full rankings: Where home insurance rate changes outpaced median household income growth, 2024

Combating home insurance rate hikes on a tighter budget: Top expert tips

It can be difficult to tighten your belt when so many basic expenses seem to require bigger and bigger bites. Still, there are ways to stack the odds in your favor, even with insurance rate hikes.

Methodology

LendingTree researchers analyzed home insurance rate changes using S&P Global RateWatch data, which reflects regulator-approved rate increases. State-level insurance rate changes were calculated by averaging the rate changes among each state’s largest insurers as captured in RateWatch.

Annual figures reflect regulator-approved rate changes for that specific year, while cumulative figures reflect compounded changes from 2020 through 2025. For comparisons involving household income, cumulative insurance rate changes reflect the 2020-through-2024 period. Wyoming was excluded due to insufficient RateWatch data.

Inflation data came from the U.S. Bureau of Labor Statistics (BLS) consumer price index (CPI). National CPI inflation rates reflect the 12-month December-to-December change, and cumulative inflation reflects the compounded December-to-December change over the period analyzed.

Because state-level inflation data wasn’t available, the analysis used BLS regional and division CPI 12-month change data as a proxy. States were matched to their corresponding region or division for December 2020 through December 2025.

To compare home insurance rate changes with household income growth, LendingTree used U.S. Census Bureau American Community Survey (ACS) with five-year estimates data for median household income. Household income growth was calculated as the percentage change in median household income from 2020 to 2024, and separately for the year-over-year change reported for 2024. These figures were then compared with cumulative home insurance rate changes over the same time windows.