WASHINGTON, DC – A recent Government Accountability Office (GAO) report has exposed dramatic regional disparities in insurance costs, with some coastal communities experiencing premium increases exceeding 50% after adjusting for inflation between 2019 and 2024.
“Homeowners in high-risk areas are facing a perfect storm of skyrocketing insurance costs and declining coverage availability, with little meaningful action from state regulators or federal policymakers,” said Kyle Herrig, Unlocking America’s Future. “Not only are premiums becoming unaffordable for millions of families, but the home insurance industry continues to abandon the communities that need protection most, leaving many homeowners to shoulder catastrophic financial risk on their own.”
Southern Coastal Communities Bear the Brunt
While the national average homeowners insurance premium rose only 3% after adjusting for inflation during 2019-2024, the crisis is far more severe in regions facing elevated natural disaster risk. Many coastal areas of North Carolina and Texas saw increases above 50% in real terms, with at least 10 zip codes across North Carolina, Texas, Utah, Florida, and California experiencing increases of more than 25% above inflation.
The affordability crisis is most acute in states already struggling with lower median incomes. Based on 2023 data, premiums as a percentage of median household income were highest in Florida, Louisiana, and Oklahoma, where typical homeowners must dedicate a significantly larger share of their earnings to insurance costs. Without adjusting for inflation, the average premium nationwide increased 27%—from $2,235 in 2019 to $2,829 in 2024.
Natural Disaster Risk Drives Premium Disparities
The GAO analysis revealed stark differences in how various natural disaster risks affect insurance costs. Homes in areas with high risk of wind damage had premiums about 58% higher than similar homes in areas with medium wind risk. Moving from medium to high wildfire risk was associated with an 8% increase in premiums. These risk-based pricing models are pushing insurance beyond reach for many families in disaster-prone regions.
Mitigation Offers Path Forward
The GAO report identified mitigation—building or upgrading homes to better withstand natural disasters—as the most promising solution. Stakeholders expressed strongest support for federal tax deductions or credits for mitigation improvements. Alabama’s Strengthen Alabama Homes program demonstrates the potential impact: the state has provided grants to about 10,000 homeowners to upgrade their roofs, with an additional 45,000 homeowners building or upgrading to FORTIFIED standards without state assistance.
“State legislators and federal policymakers must act now to prevent this crisis from devastating millions of American families,” said Herrig. “Tax incentives for home hardening, mandatory insurer discounts for mitigated properties, and targeted infrastructure investments in high-risk communities are essential steps toward making homeowners insurance affordable and available again.”
###
