Rising insurance costs are becoming a major factor in housing affordability, particularly for first-time homebuyers, according to the 2026 State of Insurance |Home Report from The Zebra.
The report found the average U.S. homeowner now pays about $2,966 annually for home insurance, while residents in high-risk states face dramatically higher costs. Florida homeowners pay the nation's highest average premiums at roughly $9,449 per year, driven by hurricanes, fraud concerns and rising rebuilding costs. Oklahoma, Mississippi, Louisiana and Nebraska also reported average premiums exceeding $5,000 annually.
The report also highlights mounting financial strain among homebuyers. First-time buyers now account for just 21% of home purchases, down sharply from 40% before 2008, while the median age of first-time buyers has climbed to a record 40 years old.
Nearly half of surveyed homeowners said they would struggle to afford their mortgage if insurance premiums increase further, and 74% reported that homeowners insurance is now a significant part of their housing budget. Researchers also found that many buyers underestimated insurance costs, expecting to pay an average of $2,692 annually but ultimately paying closer to $2,887.
Equally frustrating for many homebuyers and homeowners is their confusion about how home insurance works and what exactly they're buying when they secure insurance. The slideshow above illustrates the percentages of homeowners who report being confused about specific insurance concepts, based on research from The Zebra.
(Lead image credit: fizkes/Shutterstock.com)
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