Survey: 45% of Homeowners Say Insurance Should Be Optional. Here’s the Price of Opting Out in Each State | Insurify

Lenders generally require homebuyers to carry insurance, yet a new Insurify survey finds 45% of homeowners believe home insurance should be optional. Hypothetically, lawmakers could prevent lenders from requiring insurance to secure a mortgage. No elected officials have suggested such an extreme proposal, as it could prove disastrous for many homeowners.

And yet, the idea has support at a time when many are urgently looking to lower their housing costs. The idea is more attractive to Americans who are disillusioned with home insurance to begin with, and that is no small figure. Nearly 3 in 5 homeowners (58%) say the U.S. home insurance system is broken.

The average homeowner pays $3,371 per year for insurance. That means the typical homeowner would save $281 per month on their average housing payment if they dropped their coverage. Such a move, however, would put them at risk of financial ruin if their home were to be endangered.

Their home could be completely destroyed, leaving them still paying for a mortgage on an unlivable property. Even if the home suffers less-than-catastrophic damage, the average home insurance claim costs around $20,438.

To better highlight the benefits and drawbacks, Insurify determined how much money the typical homeowner in each state would save on their monthly housing bill by dropping their insurance coverage. Insurify also surveyed 1,001 homeowners to better understand their attitudes toward home insurance.

Key findings

• The average monthly housing payment for American homeowners would drop 13% — about $281 per month — if mortgage lenders couldn’t require insurance.

• Insurify projects that Louisiana (31%) and Florida homeowners (30%) would see the largest savings if they canceled their coverage. Vermont and New Hampshire would see the smallest savings, at 4% apiece.

• Mortgage lenders generally require homebuyers to carry insurance, but 45% of homeowners — including majorities of Gen Z and millennials — say home insurance should be optional.

• Nearly 3 in 5 homeowners say the nation’s home insurance system is broken, and 54% say they generally distrust the insurance industry.

• Americans are open to more significant insurance reforms. More than one-third (38%) support freezing insurance rates until costs stabilize. One quarter (24%) support nationalizing home insurance by eliminating private insurers, including 22% of self-identified conservatives.

Louisiana, Florida homeowners would save the most without insurance coverage — but at a cost

Becoming a homeowner is one of the most important financial goals for many Americans. But many, especially younger homeowners, often discover that maintaining a home is more expensive than they anticipated, particularly when it comes to insurance costs. With other budget items, consumers can cut back on costs when financial pressures reach a tipping point. But their options are limited for insurance, as lenders require borrowers to carry insurance as a condition of their mortgage.

If that changed and lenders permitted homeowners to drop their coverage, Gulf Coast residents would see some of the most notable changes in costs, saving nearly $10,000 in average annual expenses in some states. Of course, those states are also the most at risk of devastating natural disasters — making dropping insurance a very high-stakes gamble.

But some homeowners would be willing to roll the dice. Nearly 3 in 10 Americans (28%) would drop their coverage if they could, Insurify found. And nearly half (45%) believe homeowners should at least have the option to drop their coverage.

1. Louisiana

• Average annual home insurance cost: $5,139 ($428 per month)

• Possible savings on monthly housing payment without insurance: 31%

• Average home insurance claim cost: $20,082

Louisiana has some of the lowest average mortgage payments but the second-highest cost for home insurance. Home insurance policies account for 31% of a typical monthly housing payment for Louisiana homeowners, along with property taxes and mortgage principal and interest.

Severe weather, primarily hurricane risk, drives up the chances of catastrophic losses. Hurricane Katrina in 2005 remains the most expensive natural disaster on record in the U.S., causing $201 billion in damage.

Louisiana has the second-lowest household income of any state, which may prompt a higher share of homeowners to go without insurance. Currently, 22% of Louisiana homeowners don’t carry home insurance, the third most of any state. Some in particularly risky areas have already made the decision to forgo coverage. In coastal, hurricane-prone Terrebonne Parish, 30% don’t have insurance.

2. Florida

• Average annual home insurance cost: $9,832 ($819 per month)

• Possible savings on monthly housing payment without insurance: 30%

• Average home insurance claim cost: $30,216

Florida homeowners continue to pay the highest home insurance premiums nationally, which account for 30% of their monthly housing payments on average. Florida is one of the riskiest states for insurers, which raises rates, since the state is susceptible to sweeping disaster losses.

In 2024, Floridians filed more than 300,000 home insurance claims in response to hurricanes. Hurricanes Helene and Milton caused roughly $100 billion in damage, according to the National Centers for Environmental Information.

3. Oklahoma

• Average annual home insurance cost: $5,090 ($424 per month)

• Possible savings on monthly housing payment without insurance: 29%

• Average home insurance claim cost: $24,925

Oklahoma has the highest average home insurance costs of any non-coastal state. Wind and hail can batter homes and lead to costly roof repairs or replacements. Oklahoma led the nation with 151 tornadoes in 2024 and had the third-most hailstorms of any state. Increasing instances of severe wind and hail mean insurers are paying out more in claims, and they’ve raised premiums to maintain their financial viability.

In 2023, Oklahoma was one of seven states where home insurers paid more money in claims than they made in premiums.2 In 2025, the average cost of home insurance rose by about 25%.

4. Mississippi

• Average annual home insurance cost: $3,547 ($296 per month)

• Possible savings on monthly housing payment without insurance: 25%

• Average home insurance claim cost: $16,797

Home insurance costs take up about one quarter of the average Mississippi homeowner’s monthly housing payment. Affording home insurance is an uphill battle for some in the state, as Mississippi has above-average home insurance costs but the lowest median household income nationally.

Mississippi law requires insurers to give discounts, ranging from 15% to 30%, to people who upgrade their homes to certain safety standards. A state program designed to offer $10,000 grants for home-hardening upgrades has hit legislative hurdles after its test phase, leaving Mississippi as the lone Gulf Coast state without an active mitigation program, according to the Mississippi Free Press.3

5. Alabama

• Average annual home insurance cost: $3,639 ($303 per month)

• Possible savings on monthly housing payment without insurance: 23%

• Average home insurance claim cost: $19,213

On average, Alabama homeowners would save the fifth most on their monthly home payment if insurance were eliminated from their housing costs. That comes out to about $303 per month, yet the average home insurance claim in Alabama exceeds $19,000. Alabama has just 53 miles of coastline but the eighth-highest expected financial losses from hurricanes, according to the National Risk Index.4

To help address weather risks, Alabama law requires insurers to provide discounts for certain home-hardening upgrades. A recent analysis showed that fortified homes suffered less damage than standard homes during 2020’s Hurricane Sally.4 Strong winds are another danger, with the state averaging about 70 tornadoes per year.5

Most homeowners (58%) say America’s home insurance system is broken

Although premiums for car insurance fell in 2025, premiums for home insurance continue to climb. In recent years, severe weather has spawned more destructive, expensive disasters. The average homeowner premium has risen 32% ($800) since the end of 2021. At the same time, homeowners in high- and low-risk states are seeing insurers decline to renew their policies.

As a result, homeowners are disillusioned with the insurance system. Nearly 3 in 5 Americans (58%) say the U.S. home insurance system is broken, and nearly half (45%) say it feels like a scam.

Younger adults have faced more barriers to homeownership than past generations. The median age of first-time homebuyers hit 40 in 2025, an all-time high.6 Constrained by low savings and high interest rates on mortgages, Gen Z homeowners feel the financial pain of rising insurance premiums more than other groups. About 33% of Gen Z said their home insurance is unaffordable, compared to 28% for Americans on average.

Insurify’s findings illustrate this frustration: 60% of Gen Zers say the home insurance system is broken, and 58% say coverage should always be optional rather than required by lenders. In fact, 46% of Gen Z homeowners said they would drop their insurance coverage if they were allowed to, compared to 28% of homeowners of all ages.

Nearly 1 in 3 homeowners say insurers are mostly to blame for high premiums

Homeowners have different ideas about who’s to blame for elevated home insurance costs. A plurality of 30% said insurers are most to blame. One in 7 respondents (14%) pointed to home repair and construction costs, followed by regulations or “red tape” (13%), fraud (13%), and climate change/extreme weather (13%).

As with many opinions, political affiliation also plays a role in who homeowners blame for insurance premiums. Left-leaning respondents were much more likely to blame climate change for premiums than conservative-leaning respondents (18% vs. 10%), while conservatives were more likely to blame repair and construction costs (18% vs. 10%).

To remain financially stable, insurers balance the premiums they charge with the financial risk they face from potential losses. Those risks have become increasingly expensive. In 2023, insurers in seven states paid out more money in claims than they made in premiums. Often, those losses are driven by large weather disasters that force insurers to make many expensive payouts at once, with rising rebuilding costs further lifting expenses.

One-quarter of homeowners support nationalizing home insurance, eliminating the private market

As affordability concerns mount, Americans are open to a range of ideas to douse flaring housing costs. Insurify found that some homeowners support unconventional, heavy-handed home insurance reforms that, if nothing else, would significantly disrupt the insurance industry.

Nearly half of homeowners (48%) support capping annual premium increases, for example, by prohibiting insurers from raising rates more than 10% in a year. About 2 in 5 (39%) support forbidding insurers from canceling policies in high-risk areas. But implementation of such an idea would likely lead to much higher costs for those in threatened zones.

A similar share (38%) supports freezing insurance rates until costs are more stable. Around one-third would approve of creating a government-run insurer that can compete with private companies, not unlike the National Flood Insurance Program.

At the more extreme end, nearly one quarter (24%) support eliminating private insurers and fully nationalizing home insurance — like universal healthcare, but for houses. The idea is at odds with free market principles, but 22% of self-identified conservatives support the idea.

Currently, the federal government doesn’t regulate home insurance as it does other financial service industries like banking.7 Instead, states regulate private home and car insurance policies, as financial risks, consumer protections, and other circumstances vary from place to place.

Tips: How homeowners can save on home insurance premiums

While homeowners express broad disappointment with the insurance industry, many have some level of faith in their insurers. About 72% of homeowners surveyed are very confident or somewhat confident that their insurer will help in a crisis.

Although home insurance premiums are rising, policyholders aren’t powerless to secure a better rate. Homeowners can take advantage of a few tactics to cut down on costs without sacrificing coverage.

• Compare policies: Too often, homeowners treat their insurance like their mortgage payment, making the same continuous payments without evaluating other options. Half of homeowners say they haven’t even considered switching insurers, according to one Insurify survey. But taking the time to compare rates among insurers is a quick way to find out whether one’s rate is reasonable.

• Check for discounts: Insurers offer a range of discounts for certain policyholders. Customers might be eligible for senior discounts, security system discounts, and loyalty discounts, among others. When in doubt, homeowners can call their existing insurance agent to make sure they’re not missing out on any savings.

• Make home upgrades: When homeowners strengthen their homes against extreme weather, those homes present less of a financial risk to insurers, and insurers often reward such improvements with discounted premiums. In certain states, like Mississippi and Florida, state law requires insurers to provide discounts to homeowners in at-risk areas who make weatherproofing home improvements.8 9

Methodology

The proprietary data featured in this study comes from an online survey that Insurify commissioned. The survey’s respondents consisted of 1,001 U.S. homeowners between 22 and 70 years old. Respondents answered up to 15 questions about their finances and insurance. The survey fieldwork took place from Nov. 26 to Nov. 28, 2025.

Insurify analysis of monthly mortgage payments is based on costs for mortgage principal and interest, as well as home insurance and property taxes. Mortgage payments assume a 10% down payment and use the Zillow Home Value Index.10 Property tax figures come from ATTOM.11 Housing costs are based on the most recent available data as of January 2026.

For home insurance rates, Insurify data scientists used their real-time database of insurance quotes from partner carriers, as well as aggregated rate filings from Quadrant Information Services. Unless otherwise stated, home insurance rates in this report represent the average annual cost of an HO-3 insurance policy for homeowners with good credit and zero claims within the past five years, covering a single-family frame house with the following coverage limits: $200,000 to $750,000 dwelling coverage depending on the locality’s typical home value, $25,000 personal property, $30,000 loss of use, $300,000 liability, and a $1,000 deductible.

Certain states also include a 2% hail deductible and/or a 5% wind/hurricane deductible. Insurify gathered Quadrant rates in every county in the United States. Statewide costs reflect the average rate for homeowners across all counties, weighted by population.

Home insurance claim severity comes from supplementary underlying metrics in the Senate Budget Committee Report “Next to Fall: The Climate-Driven Insurance Crisis is Here — And Getting Worse,” which captured average claim severity in each ZIP code for 2018–2022. Insurify data scientists averaged claims figures by state and adjusted for inflation.

For media inquiries or questions about our study, please contact the author here.