An analysis released Monday stacks county-level averages for homeowners premiums against property taxes and finds premiums now come out on top in about two-thirds of counties. The researchers also estimated the weather-driven share of auto coverage; when that piece is added to homeowners insurance, the combined tab exceeds property taxes in three-quarters of counties.
Across the US, homeowners policies averaged by county climbed 45% in the past decade after adjusting for inflation, while Nebraska led with a 79% rise. On average at the county level, owners are paying 14% more for homeowners insurance than for property tax, and that gap widens to 30% when weather-linked auto premiums are included, according to Andrew John Stevenson of Bloomberg Intelligence. The affordability squeeze is shaping household budgets and, with midterm elections next month, the political conversation.
The report ties rising premiums in part to more severe weather associated with climate change. Hail and winter conditions are pushing rates higher across the Midwest and Mountain West, with Colorado, Utah and Minnesota standing out. The same hail patterns are boosting auto claims in the Great Plains and Upper Midwest, which raises auto premiums there.
State tax structures change how this shows up. In the Southeast, where property taxes are among the lowest, insurance can run 2.5 to 4 times the local tax bill. By comparison, Northeastern and Western states and major metro areas have higher taxes, so even fast-rising premiums still represent a smaller slice of the tax burden.
Data for the study come via the US Census and state insurance regulators, alongside federal weather and transportation agencies. It lands as disaster recovery costs are increasingly shared with states and cities. The federal government covered about 90% of recovery spending over the last 20 years, but the split is now moving toward roughly half federal and half local.
Stevenson offered two examples. After Hurricane Harvey in 2017, Texas received $23 billion in federal support, compared with $4 billion from local sources. After the Los Angeles fires in January 2025, Washington provided California $2.6 billion, and Californians covered $3.5 billion themselves. The shift is "a very daunting proposal for local government, local budgets, because they just don't have that kind of capital on hand to deploy on a kind of ad hoc basis," he said. "They would like to spend that on improving local infrastructure, period, not replacing local infrastructure."
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Climate Central's database shows that for 2025, the five-year running average of disaster losses reached 156 billion dollars, which is 10 times the 1985 level after inflation. That backdrop likely adds pressure to municipal bonds as localities direct resources to rebuilding rather than expansion.
For households, rising deductibles mean owners pay more before insurance kicks in. That out-of-pocket hit leaves less cash for things that bolster local sales tax receipts, like restaurants or games. Alexandra Glickman, who leads Arthur J. Gallagher & Co.'s worldwide real estate and hospitality practice, said insurance is becoming more expensive but is still crucial as disasters become larger or occur more often.
She advised policyholders to prepare, grasp how risks are changing, and be "willing to pay the premium for it." "You can't necessarily stop Mother Nature," she said. But "you can make it home" with the right precautions.
The bottom line: insurance inflation is colliding with local finance. Watch for knock-on effects in insurers with heavy catastrophe exposure, regional banks tied to property markets, and muni issuers in disaster-prone areas, as higher premiums and tighter budgets ripple through your portfolio.
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