Enid, Okla., surrounded by farms about 90 minutes north of Oklahoma City, has an unwelcome distinction: Home insurance is more expensive, relative to home values, than almost anywhere else in the country.

Enid is hardly the American community that is most vulnerable to damaging weather. Yet as a share of home prices, insurance costs more in parts of Enid than in New Orleans, much of which is below sea level. More than in Paradise, Calif., which was destroyed by the Camp fire in 2018. More than in the Florida Keys, which are frequently wracked by hurricanes. Even more than in the Outer Banks of North Carolina, where houses have begun slipping into the rising sea.

Enid’s plight reveals an odd distortion in America’s system of pricing home insurance. As a warming planet delivers increasingly damaging weather, the cost of home insurance has jumped drastically. But companies are charging some people, especially in the middle of the country and parts of the southeast, far more than other homeowners with similar levels of risk, an examination by The New York Times has shown.

Industry experts offer several reasons for the disparities, including the fact rural states have fewer homeowners to share risk, and states have varying rates of insurance fraud, which can drive up premiums.

But new research points to a striking pattern: Higher premiums are being charged in states where regulators apply less scrutiny to requests for rate increases, compared with states where officials question the justifications offered by companies and try to keep rates low, the data show.

The analysis is based on new data that make it possible for the first time to see what households pay for home insurance by county and ZIP code, across the United States. The average premium jumped 33 percent between 2020 and 2023, far more than the rate of inflation, the data show. But in some places, homeowners are paying more than twice as much for insurance, as a share of home value, than people who live elsewhere and face similar exposure to severe weather.



Where properties are most at risk

Where homeowners pay the most

relative to home values

COMPOSITE RISK SCORE

AVG. PREMIUM AS A SHARE OF HOME VALUE

10

20

30

40

50

60

70

80

90

LOW OR

NO DATA

0.4%

0.8%

1.2%

1.6%

2.0%

2.4%

Sources: Keys and Mulder, National Bureau of Economic Research (2024); Zillow; FEMA; First Street Foundation.

 

Note: “Average premium as a share of home value” compares median home insurance premium in 2023 to Zillow’s typical home value estimate in each county. State average shown in counties with few or no observations.

As a result, America’s home insurance market is increasingly distorted, said Ishita Sen, a professor of finance at Harvard Business School who studies why insurance rates diverge from risk.

In communities where insurance rates exceed the actual risk, home ownership can be unaffordable. And in places where insurance prices are too low, it encourages people to move into homes in areas likely to be hit by wildfires or other disasters that could deliver financial ruin, Dr. Sen said.

The market is “incentivizing all sorts of crazy behavior,” she said.

Getting a detailed look at the cost of insurance in different parts of the United States has been almost impossible until now because private insurers don’t publicly disclose what they charge. But two researchers, Benjamin Keys, a professor of real estate at the University of Pennsylvania’s Wharton School, and Philip Mulder, a professor at the University of Wisconsin School of Business, found a workaround.

Homeowners often pay their insurance premiums together with their mortgage and property tax, through an escrow account. They make a single payment every month to a mortgage service company, which then pays the mortgage lender, the local government and the insurance company. The system is designed to ensure homeowners never miss a payment.

Working with CoreLogic, a property information and analytics company that collects data from mortgage servicers, the researchers obtained data for about 12.4 million of the nation’s roughly 80 million owner-occupied households. That data showed how much those households paid in escrow annually from 2014 through 2023. After deducting payments for mortgages, property tax and other fees, they could estimate what each household paid for property insurance.




Note: Inflation-adjusted. Each line depicts the median of all loan observations within a risk group.

There is certainly a relationship between climate risk and what insurance companies charge for coverage in case of damage from extreme weather. But all kinds of other factors get in the way, causing a misalignment between risk and premiums.

In McCurtain County, Okla., for example, the typical homeowner paid an average of $2,837 for insurance. But in the same area with the same weather just across the state line, the average homeowner in Little River County, Ark., paid $1,673.

The cost of insurance is often higher for large, expensive homes because they cost more to replace. To get more accurate comparisons, Dr. Keys and Dr. Mulder looked at insurance costs as a share of the typical local home value.