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Home insurance premiums have increased so sharply over the past decade that they now exceed average property-tax bills in two-thirds of US counties, according to Bloomberg Intelligence research.
The findings add another dimension to the housing affordability pressures facing American households ahead of November’s midterm elections.
Extreme weather associated with climate change is contributing to higher insurance costs, alongside growing financial exposure for homeowners and local governments.
- Average US home insurance premiums now exceed property taxes in two-thirds of counties, following a 45% inflation-adjusted increase over the past decade.
- Extreme weather is driving regional insurance costs higher, with Nebraska premiums rising 79% and homeowners in Southeastern states paying up to four times their property-tax bills.
- Rising disaster losses and reduced federal recovery funding are increasing financial pressure on local governments, homeowners and municipal budgets.
Average US homeowners insurance premiums, measured at the county level, have risen 45% over the past decade after adjusting for inflation. Some states have experienced considerably larger increases, including Nebraska, where premiums climbed 79%.
When the portion of auto insurance premiums attributable to extreme weather is included, combined home and auto insurance costs exceed property taxes in 75% of US counties.
Extreme weather drives regional home insurance rate increases
The regional distribution of insurance costs reflects differences in weather exposure and local taxation.
Hailstorms and winter weather are contributing to higher premiums across the Midwest and Mountain West, particularly in Colorado, Utah and Minnesota. Frequent hail damage is also raising auto insurance costs in the Great Plains and Upper Midwest.
In Southeastern states, where property taxes are among the lowest in the country, homeowners insurance premiums can reach 2.5 to 4 times annual property-tax bills.
The relationship differs in the Northeast, Western states and major metropolitan areas, where comparatively high property taxes mean insurance premiums represent a smaller proportion of the tax bill.
Property-tax increases have become a growing political issue across the US. Yet homeowners already pay an average of 14% more for insurance than property taxes at the county level, according to Andrew John Stevenson of Bloomberg Intelligence.
Including weather-related auto insurance costs raises that difference to 30%.
The analysis combines information from the US Census, state insurance regulators and federal agencies responsible for weather and transportation data.
Federal disaster funding cuts increase pressure on local governments
Higher insurance costs are coinciding with changes in federal disaster recovery funding that could place additional financial demands on state and municipal governments.
Under the Trump administration, states are becoming less reliant on federal recovery assistance as Washington reduces its contribution to disaster costs.
Over the past two decades, the federal government has covered approximately 90% of disaster recovery expenses. The division between federal and local funding is now approaching 50-50.
Following Hurricane Harvey in 2017, Texas received $23 bn in federal recovery funding, compared with $4 bn in local spending, according to Stevenson.
After the January 2025 Los Angeles wildfires, federal assistance to California amounted to $2.6 bn, while spending by Californians reached $3.5 bn.
The shift is “a very daunting proposal for local government, local budgets, because they just don’t have that kind of capital on hand to deploy on a kind of ad hoc basis,” Stevenson said. “They would like to spend that on improving local infrastructure, period, not replacing local infrastructure.”
Rising disaster losses threaten municipal finances and household spending
The financial burden is increasing as natural disasters generate substantially greater economic losses.
The five-year average of disaster losses reached $156 bn in 2025, approximately 10 times the inflation-adjusted level recorded in 1985, according to data maintained by the nonprofit research organisation Climate Central.
Higher recovery costs could place pressure on municipal bonds as local governments direct more resources toward rebuilding damaged infrastructure rather than supporting economic growth.
Households face additional financial exposure through rising insurance deductibles. Higher deductibles require homeowners to cover a larger share of repair and recovery expenses before insurance payments begin.
Combined with increasing premiums, those out-of-pocket costs reduce disposable income and can affect spending in local economies.
Households with less money available for restaurants, sporting events and other discretionary activities may generate less economic activity supporting local tax revenue.
For municipal governments, the combination of higher disaster recovery obligations, reduced federal assistance and constrained household spending presents a growing fiscal challenge, particularly in areas repeatedly exposed to severe weather.
