Insurance Premiums Surge 74%: Circumstances, Not Greed, Are the Main Driver
Homeowners insurance premiums up 74% from 2018-2025, with five of eight years unprofitable.
US homeowners insurance premiums rose 74% between 2018 and 2025, driven by construction costs that surged 55% in just two years and catastrophe losses that topped $100 billion annually for four straight years. Health insurance premiums rose 38% over the same period, and while reported profit margins shrank to 0.8%, the ACA’s Medical Loss Ratio rule incentivized insurers to vertically integrate with providers—shifting profits to subsidiaries and undermining the credibility of those low margins. Market exits by State Farm and Allstate in states like California and Florida concentrated risk among fewer carriers, further pushing premiums higher.
- Homeowners premiums rose 74% from 2018-2025; industry lost money in 5 of 8 years, debunking greed as primary cause.
- Construction costs surged 55% in 2 years (2020-2022); catastrophe losses exceeded $100B globally for 4 consecutive years.
- ACA's MLR rule incentivized vertical integration in health insurance, inflating costs while masking profits at subsidiaries.
Why It Matters
Rising insurance premiums hit household budgets hard; understanding the real drivers is essential for effective policy and consumer action.