Homeowners insurance rates across the U.S. rose for the second consecutive year, with an average increase of 10.4% in 2024, following a 12.7% increase in 2023, according to S&P Global Market Intelligence. Some states saw even larger spikes, with Nebraska leading at 22.7%, followed by Montana, Iowa, Minnesota, Utah, and Washington, all experiencing 20%+ increases.
Hawaii Homeowners Insurance Rates See Above-Average Growth
Hawaii Homeowners Insurance rates experienced a moderate but notable 11.3% increase in 2024, placing it slightly above the national average. While this rise is less dramatic than in some mainland states, it reflects the ongoing risks posed by natural disasters, particularly in the wake of the devastating 2023 Lahaina wildfires.
The wildfire, which destroyed thousands of properties and caused an estimated $5.5 billion in damages, has intensified concerns about insurance availability and affordability in Hawaiʻi. A recent Hawaiʻi Supreme Court ruling cleared the way for a $4 billion settlement for fire victims, resolving disputes over insurers’ ability to pursue legal action against parties held liable for the fire. While this decision accelerates financial relief for victims, it raises questions about how insurers will adjust premiums moving forward to account for such large-scale payouts.
Which Insurers Raised Rates the Most?
Among major insurance providers, American Family Insurance saw the largest increase (16.5%), followed by Liberty Mutual (14.5%) and Progressive (13.5%). In some cases, rate hikes were extreme—Liberty Mutual raised Montana premiums by 44.1%, and Farmers Insurance increased Maryland rates by 53.5%.
What’s Next for Hawaii Homeowners Insurance?
With the 2023 wildfires marking one of the deadliest in U.S. history, insurers may continue reassessing risks in coastal and high-risk fire zones, potentially leading to future policy changes and premium increases. Hawaii homeowners should stay informed about how legal rulings, climate risks, and industry trends will impact insurance affordability and availability in the coming years.
Federal Reserve Chair Jerome Powell recently warned that some regions could become unmortgageable as lenders and insurers retreat from high-risk zones. This could have major implications for Hawai‘i’s real estate market, particularly as climate risks grow.
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