A new report from the Government Accountability Office finds that average premium increases between risk levels are larger for wind than for wildfire.
Between 2019 and 2024, homes in areas classified as severe or extreme wind risk had premiums about 58% higher on average—approximately $1,294 more per year—than similar homes in major wind risk areas, the next lower category.
By comparison, premiums for homes in severe or extreme wildfire risk areas were about 8% higher—roughly $181 more annually—than those in major wildfire risk areas.
The findings highlight differences in how premiums vary across catastrophe risk categories, particularly at the highest risk levels. The report also shows a 15% premium increase, or about $292 per year, between minor/moderate and major wind risk areas. This compares with an 11% increase, or roughly $222 per year, for wildfire risk over the same range.
Premiums in areas at severe or extreme risk for wind and wildfire also grew faster than premiums in areas at major risk, the office reported.
“For example, for each year since 2021, premiums in ZIP codes with severe or extreme risk for wind or wildfire grew by 6–10% on average, and premiums for ZIP codes with major risk grew by 1–4%,” the report said.
Related: California Drought, Wildfire Risks Grow as Snow Falls Short
Overall, the GAO reported that U.S. homeowners premiums generally tracked inflation between 2019 and 2024 but rose more in disaster-prone areas.
The average premium rose about 3% during that time after adjusting for inflation, while rates in parts of certain states, particularly southern coastal areas at high risk of wind damage, rose by 25% or more.
Many coastal areas of North Carolina and Texas saw increases of more than 50% in real terms, the report said. The highest percentage increases in estimated average premiums occurred in parts of North Carolina, Texas, Utah, Florida and California.
After being asked to review issues related to homeowners insurance, the GAO analyzed 2019–2024 data on private homeowners coverage and 2014–2023 data on insurers of last resort to produce its trends report.
The office also interviewed representatives from the Federal Insurance Office, four insurance industry groups, three consumer advocacy organizations and four state insurance regulators.
Topics
Catastrophe
Natural Disasters
Wildfire
Pricing Trends
Interested in Catastrophe?
Get automatic alerts for this topic.
