The Hidden Reason Your Home Insurance Keeps Going Up

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By Nathan Paulus
Edited by Venus Zoleta

Updated: April 21, 2026

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Home insurance renewals keep arriving with higher premiums. Claims histories are clean. Properties haven't changed. Yet the bills keep climbing.

Economists at the Wharton School and the University of Chicago studied 47 million mortgage escrow records and found that homeowners insurance premiums rose 33% in nominal terms between 2020 and 2023. The single biggest driver wasn't roof condition, claims history or insurer profit margins. It was a global market most homeowners have never heard of: reinsurance.

What Reinsurance Is and Why Insurers Buy It

Reinsurance is insurance for insurance companies. Insurers buy it from global capital markets in Bermuda, London and Zurich to protect against catastrophic losses large enough to threaten their solvency. When a major hurricane generates claims that exceed an insurer's retained limit, the reinsurer covers the excess, keeping the insurer solvent and the claims paid. When reinsurance gets more expensive, insurers pass that cost to policyholders, often without explaining why.

How Reinsurance Prices Doubled in 5 Years

Between 2018 and 2023, reinsurance prices roughly doubled, according to research by Benjamin Keys of the Wharton School and Philip Mulder of the University of Chicago. Their 2024 NBER working paper is the largest study of U.S. home insurance pricing published to date.

Three factors drove the increases:

  1. 1
    Catastrophe losses accelerated

    Storms, wildfires and floods hit harder and more frequently, raising the expected losses reinsurers had to price.

  2. 2
    Construction costs jumped

    Rebuilding the same home cost more after 2020, so the coverage needed from reinsurers grew alongside reconstruction prices.

  3. 3
    Capital markets tightened

    Higher interest rates drew capital away from reinsurance, reducing supply and pushing prices up while demand for coverage kept rising.

Global reinsurance premiums grew from roughly $208 billion in 2013 to $378 billion in 2023. That capital cost flows to every policyholder in the markets those reinsurers serve.

From Bermuda to the Policyholder

Keys and Mulder traced the full chain from global capital markets to individual ZIP codes. Their 47 million mortgage escrow observations from 2014 to 2023 produced the first county-level and ZIP-level homeowners insurance premium maps for the entire United States. Average nominal premiums increased 33% from 2020 to 2023, a 13% real increase after adjusting for inflation, outpacing wages, home value appreciation and overall inflation during the same period.

Keys and Mulder also found the relationship between disaster risk and premiums grew tighter. In 2018, one standard deviation of additional disaster risk translated to roughly $250 in additional annual premiums. By 2023, that same risk increment translated to $425. The reinsurance market was repricing the cost of concentrated catastrophe exposure, and primary insurers passed every dollar through.

Among the ZIP codes with the heaviest disaster exposure, Keys and Mulder estimate the reinsurance shock alone added nearly $300 per year to premiums in 2023.

Who Gets Hit Hardest

Florida is the most acute case. Reinsurance accounts for up to 40% of a Florida homeowner's total premium. Homeowners aren't paying for their individual claims history so much as they're paying for their ZIP code's position in a global loss model.

But the repricing hasn't stayed on the coasts. Colorado and Montana have moved into the bottom 10 states for affordability, driven by wildfire and severe storm losses. MoneyGeek's analysis of home insurance rates by state shows Nebraska, Colorado and Montana among the most expensive states in the country, all landlocked and none primarily hurricane-exposed. The primary driver isn't hurricane risk. It's severe convective storms, wildfires and floods, the category the industry calls secondary perils, and they've pushed the reinsurance shock deep into the interior.

2025 Catastrophe Losses Made Things Worse

The reinsurance market priced in rising losses. The losses arrived on schedule.

U.S. insured catastrophe losses in 2025 reached $103.1 billion, 12% above the 10-year average, according to Gallagher Re. The year included 23 individual billion-dollar events; 16 were in the United States. Secondary perils accounted for a record 92% of global insured losses. Severe convective storms alone generated $51 billion, the third-costliest year on record for that peril.

Swiss Re projects insured catastrophe losses could reach $148 billion in 2026 under a trend scenario and $186 billion by 2030. Reinsurers build expected future losses into their pricing, not just past losses. The market isn't catching up to history. It's pricing what it thinks is coming.

Housing Market Effect

The reinsurance shock doesn't stop at homeowners insurance bills. It's moving into home values.

Keys and Mulder found that the 2023 reinsurance shock reduced home values by an average of $8,400. Higher expected premiums reduce what buyers will pay, because the cost of ownership has risen permanently. Buyers aren't pricing today's premium into their offers. They're pricing in the trajectory. For owners in high-risk markets, the result is a double hit: higher carrying costs and lower asset values.

Where Premiums Are Highest

The five most expensive states for home insurance all sit in the South and Great Plains, where hurricanes, tornadoes and severe convective storms are most frequent. Nebraska at fifth, with no hurricane coast, reflects how broadly the reinsurance repricing has spread into severe storm and tornado exposure.

Florida
$10,384
$865
+193%
Oklahoma
$7,683
$640
+117%
Louisiana
$7,304
$609
+106%
Texas
$6,715
$560
+89%
Nebraska
$6,277
$523
+77%

 National average: $3,548 a year. Based on a 2,500-sq.-ft. home with $250K in dwelling coverage. Rates vary by home value, location and insurer. Source: MoneyGeek analysis, Quadrant Information Services.

See all 50 states

What Homeowners Can Do

Insurers aren't raising rates to pad profits. They're paying more for the capital needed to stay solvent, and insurers pass that cost to policyholders.

  1. 1
    Mitigation investments now carry a real return

    Keys and Mulder found the risk-premium gradient has steepened: every unit of disaster risk homeowners reduce through home hardening, roof replacement or fire-resistant landscaping cuts premiums more than it would have five years ago. A $10,000 roof upgrade that cuts annual premiums by $600 pays back in about 10 years, assuming reinsurance-driven increases continue at 10% a year.

  2. 2
    Shopping across insurers matters more than it used to

    Insurers access reinsurance markets in different ways and carry different concentrations of risk. Rate variation across insurers in the same ZIP code has widened, which means comparison shopping for homeowners insurance produces a larger payoff than it did five years ago.

  3. 3
    A higher deductible is a direct reinsurance play

    Homeowners who absorb more small-loss risk through a higher deductible allow their insurer to cede a smaller exposure to the reinsurance market, reducing the cost for both.

Homeowners insurance is no longer just a local transaction between a policyholder and an insurer. It's the tail end of a global capital pricing chain that runs from catastrophe models in Bermuda, through Lloyd's of London, to an insurer's actuarial team, and finally to the renewal notice. Premiums rose because the price of risk went up everywhere, and policyholders sit at the end of that chain.

About Nathan Paulus

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Nathan Paulus is Head of Content and SEO at MoneyGeek, where he leads content strategy, produces original data research, and oversees the site's coverage across insurance, consumer costs, transportation safety, housing, public policy, and personal finance. He also performs expert reviews of published studies, assessing methodology, source quality, and factual accuracy before content reaches readers.

Research and Analysis

In nearly six years at MoneyGeek, Paulus has published more than 100 original studies and explanatory guides. His data work ranges from insurance rate analyses to broader consumer and public policy research. On the insurance side, his studies include 50-state comparisons of health care outcomes, costs, and access; an analysis of how uninsured rates track with state Medicaid expansion decisions and electoral patterns; full-coverage auto rate analyses across major insurers in all 50 states; and an examination of how premium trends relate to industry underwriting losses using combined ratio data from Fitch Ratings, AM Best, and Bureau of Labor Statistics CPI figures. Beyond insurance, his research covers vehicle pricing trends across the U.S. new car market, summer traffic fatality rates by state, homeowner underinsurance ratios using mortgage and policy data, and housing affordability across all 50 states.

His research has been cited by Bloomberg, the Los Angeles Times, Forbes, Fast Company, the San Francisco Chronicle, USA Today, and NBC Los Angeles, and referenced by leading universities including Harvard, MIT, Stanford, and Yale.

Career

Growing up, Paulus developed an early interest in personal finance through his grandmother, who emphasized saving over earning as the foundation of financial stability. That perspective shapes how he approaches making financial data accessible to general audiences.

Paulus joined MoneyGeek in July 2020 as Director of Content Marketing, leading the content team and directing data journalism production across insurance and personal finance verticals. He was promoted to Head of Marketing and Communications in December 2023, taking on broader responsibility for digital PR and communications strategy. He has held his current role as Head of Content and SEO since January 2025. Before MoneyGeek, he served as Director of Content Marketing and SEO at Ventrix Advertising, where he was part of a small team that built two content sites from the ground up, contributed to link-building programs that secured more than 1,500 unique referring domains within a year, and helped manage a marketing team of more than 20 people. Earlier, he spent two and a half years at ABUV Media progressing from Marketing Research Analyst to Senior Marketing Tactics Analyst, building his foundation in audience research, content strategy, and SEO.

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