As homeowners insurance becomes more expensive, many Americans are choosing to go without it – even as risks that are prevented, or at least mitigated, by insurance coverage increase.
The Federal Reserve’s Economic Well-Being of U.S. Households of 2024, released in May 2025, is the latest analysis to document the trend. Across the country, 7% of all homeowners in the survey of more than 12,000 respondents had no insurance, the report found, although there were some discrepancies based on geography.
When asked why they didn’t have homeowners insurance, 43% said they “couldn’t afford it”, while another 19% said “it is not worth the cost.” And respondents with fewer financial resources were among the most likely to go without insurance. Roughly 3 in 10 homeowners with income less than $25,000 or those whose only asset was their home went without.
The Fed’s findings track almost exactly with a report published in early 2024 by the nonprofit watchdog group Consumer Federation of America. Approximately 7.4% of American homeowners are uninsured, that report found, representing 6.1 million homes.
“Homeowners earning under $50,000 per year are twice as likely to lack insurance compared to homeowners in general,” CFA’s authors wrote, adding that 22% of Native American homeowners, 14% of Hispanic homeowners, and 11% of Black homeowners have no insurance.
The findings are concerning, the report adds, because it means those owners “are at risk of losing their homes in the face of ever-escalating climate disasters and storms.”
See also: Climate risk will take trillion-dollar bite out of America’s real estate, report finds
More recent research suggests the threat may be even more stark. An analysis from data analytics provider First Street, released in May 2025, found a direct correlation between lack of insurance and foreclosures. But First Street’s findings also demonstrate it’s not just the uninsured homes that suffer, but the broader communities as a whole.
When storms hit and homeowners fall into delinquency, there’s less tax revenue for municipal services like transportation and less demand boosting the local economy. Homes may be abandoned or not kept up, and the value of even undamaged homes may increase more slowly or decline outright.
Still, there are good reasons why millions of homeowners say insurance is too expensive for them. 2025 data from CFA shows that in 2024, a typical homeowner – with a midrange credit score and a house with a $350,000 replacement value – faced an average premium of $3,303 per year – $275 per month.
Those numbers have been growing. First Street has shown that premiums started to surge around 2013. As of 2022, insurance costs made up more than 20% of the typical mortgage payment, roughly triple the 7-8% that they made up in the decade or so before 2013.
More: Homeownership used to mean stable housing costs. That’s a thing of the past.
Since 2019, foreclosures have ticked up in tandem with the cost of insurance, First Street has shown. “The one thing proven to prevent foreclosures is getting so expensive that it is causing foreclosures,” the group said.
To combat the problem, CFA has a few recommendations. The group believes that requiring insurance companies to publicly release data on homeowners insurance underwriting, pricing, coverage, and claims every year would be a helpful start, by making the industry more transparent.
CFA also recommends investing federal and state dollars in housing resiliency, and requiring that insurance companies charge lower premiums of homeowners who make climate risk reduction upgrades to their homes.
“The pace of rapidly rising premiums is increasingly unsustainable,” CFA said.
This article originally appeared on USA TODAY: Home insurance costs are rising. So millions choose to go without.
