How Homeowners Insurance Premiums Change Based on Select Factors
GAO-26-107867, February 27, 2026
Homeowners insurance plays a critical role in helping Americans recover financially from natural disasters. For example, the Los Angeles area wildfires in January 2025 caused tens of billions of dollars in insured property losses. Because insurance companies have incurred such losses, some U.S. regions have experienced rising premiums and decreasing availability of homeowners insurance. For instance, we found that premiums in coastal areas in the South that are at high risk of wind damage have increased 25% or more between 2019-2024. Insurers calculate homeowners insurance premiums based on:
- • The risk of loss posed by certain characteristics of a property, and
- • The type and amount of coverage a homeowner chooses
Insurers typically calculate the premium starting with a base rate, which can vary by state and by type and amount of coverage. They then adjust the premium up or down using rating factors, such as the construction material or the property’s existing fire protection system. In general, the higher the risk tied to a rating factor, the more it affects the premium. Rating factors can also vary among companies and states, leading to different premiums.
How to Use this Interactive Graphic
This interactive shows how a limited number of factors might affect a homeowner’s final monthly insurance premium. Use the dropdown menus to select values for all of the rating factors to see how they might affect a hypothetical homeowners insurance monthly premium at two different companies. For instance, insurers generally charge higher premiums for homes located in areas subject to severe or extreme risk of wind or wildfire, and charge less for newer homes. Since pricing of homeowners insurance policies varies across companies, homeowners should consider comparing insurance prices.
Source: GAO.
Notes: In reality, an insurer may use more factors than the 4 presented here. Therefore, the premiums shown do not reflect actual homeowners insurance premiums charged to customers. The numbers in the table above are derived from actual insurer rate filings for 2 companies in California for 2023. We assume $100,000 coverage and a 1% deductible for both company A and company B. The effect of each risk factor on the premium is assumed to be independent of other factors.