US Homeowners Face Rising Insurance Premiums and Falling Claim Payouts

Homeowners across the United States are seeing their insurance costs climb sharply. Since 2021, average premiums have risen about 46%, with the national average now around $2,800 – a more than 40% increase in the past year – and projections call for another 4% jump to $3,057 in 2026. The surge is especially acute in flood‑prone states; Florida tops the list with an average premium of $8,292, driven by hurricane risk and high litigation costs.

At the same time, the likelihood of receiving a claim payout has dropped to just over 50%. Data from the Wall Street Journal show that the five largest home‑insurance providers – Allstate, Farmers, Liberty Mutual, State Farm and USAA – failed to pay on more than 44% of claims last year. Farmers had the highest non‑payment rate at 52%, USAA declined about 51%, Allstate 47%, Liberty Mutual 41% and State Farm roughly 31%. In Florida, more than 95,000 homeowners had claims denied after Hurricane Milton in October 2024, many because damage fell below increased deductibles. The combination of higher premiums, higher deductibles, and reduced payout rates is forcing many households to make financial sacrifices or consider dropping coverage entirely.