Home Insurance Outstrips Property Taxes in Two-Thirds of US Counties

You can’t necessarily stop Mother Nature, said Alexandra Glickman, global practice leader for real estate and hospitality at Arthur J. Gallagher & Co., but you can make it home with the right precautions. Home insurance premiums have climbed so steeply over the past decade that the average policy now outstrips the average property-tax bill in two-thirds of U.S. counties. An analysis published by Bloomberg Intelligence points to soaring insurance costs as a driving force behind the broader affordability crunch squeezing American households ahead of next month’s midterm elections.

Home Insurance Premiums Outpace Property Taxes in Two-Thirds of Counties

Homeowner insurance policies averaged at the county level have jumped by an inflation-adjusted 45% over the last ten years. Certain states face much sharper increases, such as Nebraska with a 79% surge. When analysts factor in the portion of auto insurance premiums driven by extreme weather, the combined cost of home and auto coverage surpasses local property taxes in 75% of the nation’s counties, according to Andrew John Stevenson of Bloomberg Intelligence.

Geographic differences dictate how the financial burden hits property owners. In the Midwest and Mountain West, hail and winter weather are pushing up rates, with Colorado, Utah, and Minnesota leading the trend. The frequency of hail damage is simultaneously driving up auto insurance in the Great Plains and Upper Midwest. Meanwhile, Southeastern states enjoy some of the lowest property tax rates in the country, but surging insurance premiums there now run 2.5 to 4 times the local tax levy. Conversely, Northeastern and Western states and major metropolitan areas carry heavy property tax burdens, which makes rising insurance costs represent a smaller percentage of the total tax bill.

Federal Disaster Funding Shifts Financial Weight to Local Governments

The spike in premiums coincides with a fundamental change in how disaster recovery is funded. The federal government has historically covered roughly 90% of disaster recovery costs over the past two decades. However, that ratio is now approaching an even 50-50 split between federal and local budgets, according to data drawn from the U.S. Census, state insurance regulators, and federal weather and transportation agencies.

The disparity between past and present federal support is stark. Following Hurricane Harvey in 2017, Texas received $23 billion in federal disaster funds compared to $4 billion in local spending. By contrast, after the January 2025 Los Angeles fires, the federal government provided California with $2.6 billion while Californians spent $3.5 billion. This shift creates a daunting reality for municipal budgets. Local governments lack the capital to deploy on an ad hoc basis for disaster rebuilding, resources they would rather dedicate to long-term infrastructure improvements.

Municipal Bond Pressures and Household Budgets Feel the Pinch

Disaster losses reached a five-year average of $156 billion in 2025, marking a tenfold increase from 1985 levels when adjusted for inflation, according to data from the research nonprofit Climate Central. This escalation places heavy pressure on municipal bonds as local economies divert funds toward recovery rather than growth.

For individual homeowners, rising deductibles mean families absorb a larger share of recovery costs before insurers pay out.

Frequently Asked Questions About Surging Insurance Costs

Why are property-tax revolts occurring alongside insurance hikes?

Homeowners are facing a compounding affordability crisis where county-level insurance premiums are now 14% higher than property taxes on average, widening to a 30% gap when weather-linked auto insurance is included. This dual financial pressure is shaping household budgets and influencing political conversations ahead of the midterm elections.

How much have disaster losses increased since the 1980s?

The five-year running average of disaster losses reached $156 billion in 2025, which is ten times the inflation-adjusted figure recorded in 1985, according to a database maintained by Climate Central.

What is the current split in disaster recovery funding between federal and local sources?

While the federal government covered about 90% of disaster recovery costs over the preceding two decades, that ratio is now moving toward an even split of roughly 50% federal and 50% local funding, forcing states and municipalities to shoulder a much larger share of rebuilding expenses.

Policyholders should prepare, be aware of changing risk and be willing to pay the premium for it, Glickman said.