The Hidden Reason Your Home Insurance Keeps Going Up

Your home insurance renewal arrives and the premium is up again. Your claims history is clean. You haven't changed a thing. Yet the bill keeps 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 your roof, your claims history or your insurer's profit margins. It was a global market most homeowners have never heard of: reinsurance.

Reinsurance is insurance for insurance companies. Your insurer buys it from global capital markets in Bermuda, London and Zurich to protect against catastrophic losses large enough to threaten its solvency. If a major hurricane generates claims that exceed your insurer's retained limit, the reinsurer covers the excess, keeping your insurer solvent and the claims paid. When reinsurance gets more expensive, your insurer passes that cost to you, usually without explaining why. See our informative guide on how reinsurance affects your rates.

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

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.

Florida is the most acute case. Reinsurance accounts for up to 40% of a Florida homeowner's total premium. Homeowners there 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 dominant 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.

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. There were 23 individual billion-dollar events; 16 occurred 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.

The reinsurance shock doesn't stop at your insurance bill. 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.

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.

Your home insurance premium is no longer just a local transaction between you and your 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 your insurer's actuarial team, and finally to the renewal notice in your mailbox. The premium went up because the price of risk went up everywhere, and you sit at the end of that chain.