Stop Paying More for Home Insurance Than Property Taxes—If You Can 

The cost of living is reaching its peak—and for some homeowners, one line on their budget is superseding all others.

New data from LendingTree finds that in 15 U.S. states, home insurance costs exceed property taxes.

“Insurance used to be an afterthought in the homebuying process for most shoppers,” LendingTree insurance analyst Rob Bhatt explained in the study. 

“In many areas today, the rising cost of home insurance is having an outsized influence over people’s buying power.”

If you’re thinking this applies to places like Florida and California, you’d be wrong. 

If you’re also thinking there’s nothing to be done about the price of insurance these days—you’d also be wrong. 

Homeowners are paying more for insurance than property taxes in almost one-third of U.S. states

As of the latest reporting, a typical American homeowner pays $311 on property taxes and $200 on home insurance monthly. This means that insurance represents 8.5% of a typical homeowner’s monthly housing budget.

But the figure is flipped for homeowners in the 15 states LendingTree identified: Alabama, Arizona, Arkansas, Colorado, Idaho, Kentucky, Louisiana, Mississippi, Nebraska, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, and West Virginia.

In these states, home insurance takes up nearly a fifth of monthly housing costs. In Nebraska, home insurance accounts for 19.4% of total monthly housing costs, or $413 a month, followed by Oklahoma at 17.6% ($278) and Texas at 14.4% ($331). 

Overall, home insurance takes up at least 10.0% of monthly housing costs in 20 states, which include Montana and Virginia, which the report found spend the same amount on insurance and property taxes.

On the opposite side of the spectrum, LendingTree found that Vermont has the lowest monthly insurance costs at $77 month, followed by Hawaii ($95), Delaware ($97), and Maine ($107).

A change in the weather

Much of these rising costs are driven by increasingly severe weather conditions in these areas.

“Nebraska, Oklahoma, and Texas all have severe wind and hail risks, and Texas homeowners face additional threats from hurricanes and even wildfires, depending on their location,” Bhatt said. “Insurance companies in these states have priced the potential costs of these types of disasters into their rates.”

However, weather risk alone doesn’t determine what homeowners pay for coverage. If it did, places like Hawaii, which has seen intense and destructive weather events in the past few years, wouldn’t fall so low on the list.

According to LendingTree, home insurance in Hawaii makes up just 2.1% of monthly housing costs, with Vermont ranking just behind as second lowest at 3.2%.

“There are other states with severe weather risks that have lower home insurance rates,” Bhatt added. 

“Insurance is generally regulated at the state level. It’s important for leaders in each state to protect their residents with policies that help make or keep home insurance affordable.”

Ways to lower the cost of your home insurance

Experts agree that homeowners have options when it comes to their home insurance and how much they pay. 

For starters, it’s important to shop around for insurance providers—whether you’re a first-time homebuyer or an existing homeowner. In truth, what you purchased when you first bought your home might not be what fits your needs and budget years later. 

"By comparing rates from multiple insurers, homeowners can not only save money, but also ensure they're getting coverage tailored to their specific needs," explains Rick Valeri, sales manager at Bamboo Insurance in Charlotte, NC.

"The savings from a thorough comparison could easily amount to hundreds of dollars annually, making it a smart investment of your time."

Case in point: In 2024,  the average borrower switching policies in cities such as Denver, Jacksonville, FL, and Dallas and San Antonio, TX, paid “at least 10% less” on average than borrowers who stuck with their carrier, according to data from Intercontinental Exchange.

To that same end, if you already have a policy, you may want to consider increasing your deductible. It’s a risky move, as you will obviously pay more out of pocket if you file a claim.

But the lower payments might save you over the course of years, and the money you have on hand can be put to use in another way to bring down your insurance: home improvements.

Replacing your roof, adding storm-resistant windows, and clearing away hazardous trees are all expensive projects—but they’re also looked at as improvements to keep your home safe by insurance lenders and thus, can be a reason for a reduction in premiums. 

A good place to start: Industry experts recommend following the Insurance Institute for Business & Home Safety guidelines, which outline proven ways to strengthen homes against the forces of wind, fire, and flood.

Finally, bundling your home insurance with your car insurance can ususally save you some money. Loyalty always pays. 

Here’s the real issue: Finding insurance in the first place 

In a separate report, LendingTree found that nearly 1 in 7 homes across the U.S. is uninsured. Put another way, 12.2 million of 86.6 million owner-occupied homes are uninsured.

Some are forgoing the coverage due to the growing costs. This is a mistake, especially if you’re a first-time buyer. Without insurance, you can’t get a mortgage. Without a mortgage, most Americans can’t buy a home.

But the bigger challenge for some is getting coverage at all.

“Insurance deserts” in such places as Florida, California, and North Carolina are becoming more common. 

“We are witnessing a significant increase in the number of clients struggling to obtain or renew home insurance in areas facing elevated climate risks, such as wildfire, flood, and hurricane zones,” Pete Walther, president and CEO of Marsh McLennan Agency Private Client Services, previously told Realtor.com.

“This trend has been exacerbated by a challenging personal insurance market that has affected not only California but also states like Florida, Texas, and Colorado. No state is immune to these challenges.”

If you live in one of these places, Walther anticipates things getting worse before they get better. The best defense continues to be a good defense. So if you have insurance in hand, make sure you’re investing in the kinds of improvements to protect and insulate your home from having your coverage dropped. 

But he also notes that the next few years should hopefully see the emergence of new coverage options and an increased focus on risk mitigation, perhaps with more state-run insurers in the mix.

So, for now, the best course of action is to remain vigilant and explore all of your options, even if they are limited.