CHICAGO, Nov. 10, 2026 (GLOBE NEWSWIRE) — Financial Health Network today released Rising Costs, Shrinking Coverage: How Homeowners Insurance Shapes Financial Health, revealing that rising premiums and shrinking coverage options are straining household budgets, threatening home equity, and making it harder for people to save, build wealth, and buy homes. The report is the first in a series from the Financial Health Network, supported by JPMorganChase, examining how the home insurance market affects the financial health of households across the United States. Upcoming reports will present new research on how households are experiencing and coping with rising insurance costs, including findings from qualitative research, a nationally representative household survey, and real-life stories from more than a dozen homeowners across the country.
The report, which combines a review of existing research with structured interviews of more than 30 experts, including regulators, reinsurance brokers, mortgage lenders and consumer advocates, argues that home insurance affordability belongs on the national financial health agenda.
The findings arrive as Americans’ confidence in their insurance coverage is falling. Financial Health Network’s Financial Health Pulse® 2026 U.S. Trends Report found that only 54% of U.S. households were at least somewhat confident their insurance would cover them in an emergency. This is the lowest share since Pulse tracking began in 2018, and points to rising homeowners insurance premiums as one possible factor. Overall financial health also slipped, with the share of Financially Vulnerable households rising from 15% to 17%, including an increase among homeowners. Only 31% of households were Financially Healthy.
Key findings of the report include:
- Insurance costs are narrowing the path to homeownership. Because premiums count toward a borrower’s debt-to-income ratio, rising costs reduce how much buyers can borrow, and some can’t close at all. Research from the Federal Reserve Bank of Chicago links a $1,000 increase in premiums to a significant rise in mortgage denials.
- Insurance is taking a bigger share of household income. The share of household income going to home insurance rose from 1.2% in 2000 to 2.1% in 2022, according to the Insurance Research Council. In California, low-income households pay a higher share of their income for coverage than higher-income households.
- Current homeowners face a greater risk of falling behind. Higher premiums are associated with a greater likelihood of missed mortgage payments, according to research from the Federal Reserve Bank of Dallas. Many homeowners in areas hit by Hurricane Milton and the 2025 California wildfires fell behind on their mortgages shortly after those disasters.
- Households are taking on more risk themselves. To keep premiums manageable, some homeowners are raising deductibles, reducing coverage or dropping insurance altogether, leaving them exposed to losses that could permanently erode their wealth.
- Coverage is harder to find. Non-renewal rates rose in 35 states between 2018 and 2023, according to the Senate Budget Committee and the number of residential policies in state insurer-of-last-resort plans grew 77% from 2019 to 2024, according to the Federal Insurance Office in the U.S. Department of the Treasury.
- Renters are affected too. Owners of multifamily and affordable housing are facing steep commercial insurance increases, which can show up as higher rents, deferred maintenance, or reduced resident services.
“Owning a home is one of the greatest investments most Americans make and one of the most dependable ways American families build wealth, and insurance is what protects that investment,” said Jennifer Tescher, founder and CEO of the Financial Health Network. “As confidence in insurance coverage hits an all-time low, more families are left carrying risk they can’t afford. That makes home insurance a financial health issue for millions of households, including renters and first-time homebuyers.”
The report finds that no single cause underlies the rise in home insurance costs. However, inflation, more frequent and widespread natural disasters, higher replacement and reinsurance costs, and population growth in high-risk areas have all pushed premiums up, while conditions in individual states have added their own pressures.
Together, these forces have created what the report calls an affordability-availability paradox, with households caught between higher prices and fewer options. Policies to fix one side tend to worsen the other, as holding rates down can drive insurers away, while letting insurers increase rates can price households out. The report’s four state case studies show how these pressures play out depending on each state’s risks and how its policymakers have responded:
- California: Decades of strict rate regulation kept premiums below actual wildfire risk, and when rates began to catch up, homeowners absorbed the shock. Policies on the state’s FAIR Plan, its insurer of last resort, have grown 152% since September 2022. New reforms aim to bring private insurers back to high-risk areas, but the benefits for consumers have yet to arrive.
- Florida: Litigation reforms have brought 17 new insurers into the state, cut the policy count of Citizens Property Insurance Corporation by nearly 73% from its 2023 peak, and 2025 premium increases were among the smallest in the country. Floridians still pay some of the highest premiums nationally, so a healthier market has not yet translated into affordable coverage.
- North Carolina: A centralized rate-setting system has kept approved rates relatively low, but an estimated 63% of homeowners policies are now priced above those rates through a provision known as “consent to rate.” Hurricane Helene showed that serious storm and flood risk now extends well beyond the coast.
- Alabama: The state has made home fortification the center of its strategy, pairing industry-funded retrofit grants of up to $10,000 with mandatory premium discounts. Homes built to the FORTIFIED standard had roughly 73% fewer claims after Hurricane Sally, though upfront costs can keep lower-income households from benefiting.
“Building savings and protecting wealth are both cornerstones of financial health, and rapidly rising insurance premiums are increasingly forcing American families to choose between the two—or in some cases, removing that choice altogether,” said Kathleen Dufraine, Managing Director, Flood & Insurance Executive, JPMorganChase. “This research brings the household perspective into sharp focus. We’re proud to support this work because clearer evidence about what families are facing is essential to developing sound, lasting solutions.”
Financial Health Network is also conducting a mixed-methods research study, including a nationally representative household survey, to understand how people are experiencing and coping with rising insurance costs. The organization will also publish a documentary-style story project featuring 15 people across the country who are navigating property insurance challenges, putting a human face on the growing risk to household financial health. Findings and stories will be published in 2027.
About the Financial Health Network
The Financial Health Network is the leading authority on financial health. We are a trusted resource for business leaders, policymakers, and innovators united in a mission to improve the financial health of their customers, employees, and communities. Through research, advisory services, measurement tools, and opportunities for cross-sector collaboration, we advance awareness, understanding, and proven best practices in support of improved financial health for all. For more on the Financial Health Network, go to https://finhealthnetwork.org/ and follow us on LinkedIn.
Press contact:
Justin Taylor, Financial Health Network
media@finhealthnetwork.org
Stephanie Hicks, Cosmo PR
stephanie@cosmo-pr.com
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