What’s Changing and How to Save

Key Takeaways:

• There are interconnected forces that are shaping homeowners premiums in 2026, including extreme climate changes, home rebuilding and labor costs, and economic uncertainties that continue unresolved.
• Forecasts for homeowners insurance costs in 2026 and 2027 show a more measured incline as compared to the drastic increases experienced during 2023 and 2024. We show you ways to reduce your costs even more.
• Annual policy reviews provide homeowners with an empowered look at their overall financial health and assist them in understanding what their coverage entails.

As we navigate the new year, homeowners insurance 2026 premium trends reflect a market that is adjusting from what was believed to be a temporary pricing cycle to what is now seen as a more sustained risk environment. Higher premiums have become a persistent issue as insurance companies try to respond to longer-term shifts, including:

• Climate Exposure – Extreme weather has become more frequent and more severe causing unprecedented events like urban wildfires (e.g., Pacific Palisades fire in 2025 and the Marshall fire in Colorado in 2021). Insurance companies are now using forward-looking computer models to supplement their historical loss data bringing higher premiums for those in potentially problematic areas.
• Costs to Rebuild – Labor shortages, enhanced building codes, and tariff-related price increases for materials are inflating the costs to rebuild homes.
• Short-term Economic Volatility – How the economy is going to respond to fundamental changes in government policy is creating significantly elevated volatility in the economy and the future outlook.
• Financial Solvency for the Insurance Companies – Insurance carriers are not about to lose money and are adjusting pricing and underwriting standards to align with their long-term sustainability. This impact is being felt by homeowners around the country.

Use this practical guide for homeowners insurance as you are navigating your 2026 insurance premium decisions.

How Living in a High-Risk Region is Changing the Availability of Coverage

If you are living in an extreme weather prone area where hurricanes, wildfires, or hail are risks, then you have probably already faced higher premiums and changes to deductible structures. In these markets (and now in many areas that are just now starting to experience weather extremes) insurers are faced with repeated catastrophic losses. This leads to stricter underwriting rules and coverage limitations, higher deductibles, and even non-renewals.

In fact, insurers have left some locations entirely or stopped writing new policies leaving homeowners with fewer and fewer options. These states are where it’s becoming more difficult to obtain homeowners coverage:

• Florida
• Louisiana
• North Carolina
• California
• Mississippi
• Oklahoma
• Colorado
• New Mexico

The Growing Market for Alternative Coverage Options

State-based Insurance Plans

When private-market insurance options are no longer available or have become too expensive, many states have created state-based insurance plans to serve as insurers of last resort. Unfortunately, these state-backed plans bring limited coverage options and not as many endorsement choices. They can be extremely high in cost as well.

Excess and Surplus Carriers

While there is an expanding role for excess and surplus carriers as traditional carriers contract, these policies can be far more expensive and may lack the choice and protections many homeowners are looking for. If you are considering this type of coverage for a high-risk property, be sure to get an expert to help with a careful review and analysis before purchasing.

What Are Home Insurance Costs in 2026?

Insurance premiums vary based on location, property size, age, characteristics, and overall risk exposure. In 2026, assuming an average size home and circumstances, Nevada, Utah, and Maine saw the lowest annual premiums with an average of $937, and Florida, Louisiana, and Oklahoma saw the highest annual premiums with an average of $2,151. That’s more than double the cost if you are in a high risk area.

So, what are the key elements that determine your home’s premium:

• Region and Location – Insurance carriers assess their exposure down to the zip code level. Wildfire zones (e.g., Northern California and the Rocky Mountains), storm corridors (e.g., ‘Tornado Alley’ in Oklahoma, Kansas, and Nebraska) and coastlines all determine the risk factors, as well as things like labor and building costs in the area and first responder infrastructure.
• Home Age and Construction Type – Older homes typically cost more than newer homes to insure. That’s because they may not meet current building codes or have dated wiring, roofs, or plumbing. Newer homes that are built with fire-resistant or wind-rated materials and defensible landscaping will get a more favorable premium rate.

Home Insurance Price Forecast – What Insurance Companies are Signaling for 2026-2027

Insurance companies are anticipating premium stabilization in the near future – however, that does not mean price reductions. Most insurance companies are projecting an 8% increase in 2026, followed by another 8% increase in 2027.

This is far less than the 14% increases most homeowners experienced in both 2023 and 2024 due to supply chain pressures carried over from the pandemic. However, the industry is still wary of pressure from extreme weather and inflated building costs.

You can expect:

• Higher deductible options (especially if you are in an area susceptible to wind, hail, or wildfire).
• Much stricter underwriting requirements.
• Reduced coverage for secondary structures, outbuildings, and improvements.

Also, you can expect to see a rise in the use of individualized profiles. Individualized profiles are data-driven assessments that result in personalized premiums through granular analysis of a homeowner’s information, including credit scores and financial health. While individualized profiles increase transparency (and scrutiny), it can also be used to the detriment of lower income households and communities of color.

What Can Be Done About Costs if You Live in a High Risk Area?

By reducing property risk, you can strengthen your insurability and secure a lower premium for your homeowners insurance. This can be done by making upgrades and improvements to your home, landscape, and any outbuildings or improvements. Upgraded safety and durability for your home and family can significantly lower your overall premium costs.

These include structural improvements such as:

• Upgrading roofs with new impact-resistant or wind and hail-resistant roofs and adding storm or impact-resistant windows and doors that can withstand high winds.
• Creating defensible space around your home and landscaping. If you are in an area prone to wildfires, check with your state or local government. There may be grants or other funding opportunities to help offset the costs of these improvements.
• Making repairs and replacements that incorporate the latest building technology and storm-resistant features.
• Updating electrical and plumbing (like polybutylene) systems and adding modern water shut-off valves.
• Adding a modern security system that is monitored by local law enforcement.
• Adding smart home devices like smoke detectors, carbon monoxide detectors.
• Adding a smart water-leak detection system.

As well as these practical ideas:

• Maintain a claims-free history. Having multiple claims demonstrates to an insurance company that you are high risk and will potentially cost them money which leads to higher premiums.
• Avoid coverage lapses.
• Re-evaluate coverage limits and deductibles.
• Bundle multiple policies with a single insurance company.

Benefits of Annual Policy Reviews and Re-Shopping in a Volatile Market

More than ever, passive renewal will be increasingly costly as premiums rise. An annual policy review for your homeowners insurance coverage, as well as all your policies, ensures that you are receiving the best coverage for your insurance dollars.

Once a year, sit down with each of your policies and compare coverage terms, endorsements, discounts, and exclusions. You can use a comparison marketplace like einsurance.com to get the quotes necessary to do a thorough analysis of costs in your area before your next renewal date.

Additionally, you may have an existing relationship with an insurance broker or agent or want to establish one through your re-shop process. With access to multiple companies, your agent should be able to answer your questions and to suggest options to secure insurance that is appropriate and, hopefully, affordable. They will also know the state of insurance in your region and can suggest alternatives if appropriate.

Be Sure You Take Advantage of All Homeowners Insurance Savings Opportunities

All insurance companies use discounts as a way of providing value to their customers while also instilling or rewarding loyalty. These discounts and savings are not always offered, and it is important to ask for all your eligible discounts during your annual insurance policy review.

Here are some important discounts to obtain:

• Multi-policy or Bundling Discount – If you have all your insurance policies through a single company, you can expect a significant cost savings, e.g., homeowners and auto insurance.
• Claims-free Discount – This is a discount reward for no claims filed during a pre-determined amount of time, usually three to five years.
• Home Security or Safety Device Discount – Discounts are often provided when you live in a gated community or secure building or when you have a monitored home security system. This can also include having a sprinkler system or fire suppression system, smoke alarms, smart locks, and more.
• Structural Upgrades – As we talked about earlier, when you upgrade to an impact or fire-resistant roof, doors, windows, storm shutters, etc., be sure to ask your insurance agent about discounts.
• New Home Discount – New homes receive discounts based on the fact that they are typically current on all building codes and safety add-ons and some are constructed with protective construction materials.
• Loyalty Discount – Long-term customers get a break on their premiums – so do seniors!
• Non-smoker Discount – Less chance of fire with non-smokers and insurance companies reward less risky behavior.
• Auto Payment Discount – You can get up to a 2.5% discount by just using auto payment through your bank. Set it and forget it. Also, some companies offer discounts for paperless/online billing.

To Sum Up

Costs continue to rise in the homeowners insurance market reaching all-time highs and there doesn’t seem to be any stopping the increase in extreme climate events and the damage that come with it. Protect your home and your family with insurance that adequately covers the unexpected.

Through increased knowledge, annual reviews, and proactive planning, you can empower yourself and guard against surprise increases. As an informed homeowner, you can still find value and feel protected in this challenging market.

Contact einsurance.com for more information and to access quotes for homeowners insurance and more.