States with the highest insurance premium spikes

80% of all housing investors, including those in the Midwest not just the coasts, are concerned about future increases in home insurance. That is one of the central conclusions ResiClub and Groundfloor reached in their joint survey of housing investors.

Nationwide, home insurance premiums increased by 11.3% on average this past year. In 2021, home insurance premiums did not rise by 10% year-over-year in any state. But by 2023, home insurance premiums rose by at least 10% in 25 states!

Here are the top 10 states that saw the highest insurance premium spikes by percentage in 2023:

1. Texas – 23.3%
2. Arizona – 21.8%
3. Utah – 20.3%
4. Illinois – 18.5%
5. Oregon – 16.5%
6. Minnesota – 15.3%
7. Nebraska – 15.1%
8. Arkansas – 14.9%
9. Oklahoma – 14.0%
10. Washington – 14.0%

Our take

Multiple factors are causing the spike in home insurance premiums, from disaster risk to housing and construction inflation. Contrary to stereotypes, the problem of rising home insurance premiums isn’t exclusive to coastal blue states such as California. Already about 90% of Florida investors missed out on at least one deal because insurance was either unavailable or unaffordable. Unless a policy solution is implemented or the incentives of the current insurance market are restructured, investors could risk seeing increasing premiums and owning depreciating real estate assets. S&P Global Market Intelligence calculates that if home insurance premiums rose 20% annually for the next 20 years, home prices would fall as much as 10%.