Here is why home insurance costs are rising in Indiana

A home, along East Silver Street/East Center Road in the southern part of Sullivan, Indiana, that was completely destroyed by an intense tornado on March 31, 2023.

A home, along East Silver Street/East Center Road in the southern part of Sullivan, Indiana, is destroyed by an intense tornado on March 31, 2023. (Credit: National Weather Service Forecast Office)

Key Points
  • Home insurance costs have risen over the past decade.
  • Insurers are charging more as storms, material costs increase.
  • Costs felt by coastal states are now moving to the Midwest.

Cierra Pitts didn’t expect her Safeco home insurance cost to rise in 2024. It had already increased by about 30% in 2023. 

Her shock was absolute when she got her annual bill: $5,459 to insure her family’s 2,300-square-foot Pittsboro ranch — up from about $1,900 last year. That’s a 187% increase.

The jump was apparently the result of a $3,500 claim Pitts had filed to fix a barn roof after an April storm. 

“If we’d have known, we’d have just paid for it out of pocket,” she said. “That’s the whole point of insurance. If something happens, you’re protected. But now if something happens, you’re paying for it on the back end.”

The price jump was too much for the young family of four to bear when coupled with rising costs across their budget line, including property taxes that have doubled over the past eight years. They are shopping around for a new policy, said Pitts, but the cheapest quote they’ve received is about $2,900 — still an increase of $1,000. 

What’s happening

Indiana personal insurance companies are facing a new reality, as increased inclement weather, supply costs and inflation have wiped out profits. 

Two smaller companies, Pekin and Secura, have pulled out of the state’s private insurance market. Others are being picky when it comes to new clients.

Customers are feeling this rise in costs. Between 2011 and 2021, Indiana homeowners insurance premiums increased by 36%. And although Indiana is faring better than other states, particularly on the coasts, experts warn that prices will continue to grow. 

Pekin, Secura leave

In October, Illinois-based Pekin announced it was no longer accepting new personal insurance customers in five states, including Indiana.

“Severe and erratic weather patterns combined with the impacts of rising inflation earlier this year have challenged the ability to keep home and property premiums at manageable levels while paying ever-increasing claim amounts,” the company said in a statement

Secura, which operates in 13 states and is based out of Wisconsin, also announced it would exit personal insurance in October. The company said it would no longer accept new customers and would phase existing ones out over the next two years. 

Marty Wood, president of the Insurance Institute of Indiana, which represents about 85% of insurance companies doing business within the state, said the cost of personal insurance has been trending up for insurance companies. 

“[Companies] have hit the point where they’re actually losing money in property for the first time last year,” Wood said. “It had been trending that direction because of weather patterns, higher prices for materials, supply chain issues, things of that nature.”

The major insurers in the state have not indicated they plan to follow Pekin and Secura, who represent a small percentage of the market, out of the state, Wood said. 

However, costs may increase as the industry tries to move back to profitability and larger companies become more selective. 

“I think you’re going to have to see prices going up,” Wood said. “How much more is all relative. With the competitive market we have here in Indiana, I don’t think we as customers are going to see a huge increase.”

Why it matters

Wood said Midwestern states remain easier to insure than coastal or high-wind states like Texas. In those areas, local governments have sometimes had to intervene as insurers left. 

In Florida, for example, the state Legislature in 2002 created Citizens Property Insurance Corporation, a nonprofit that insures residents who cannot find insurance elsewhere. According to its website, Citizens has become one of the largest insurers in the state. 

A New York Times investigation found that some insurers are fleeing the home insurance market throughout the Midwest. It noted that Indiana companies lost money on home insurance for the first time in at least a decade — a trend seen throughout the region. 

The problem extends beyond the Midwest. According to the Insurance Information Institute, $1.12 was paid in claims and expenses for every $1 collected through premiums in the nation in 2023. 

Indiana still affordable 

Although costs are rising, Indiana homeowners insurance premiums remain cheaper than the national average. 

According to the National Association of Insurance Commissioners, which represents state regulatory agencies, Hoosiers paid an average of $1,058 for homeowners insurance in 2021. The national average was $1,411. 

Indiana saw a 36% increase in homeowners insurance premiums between 2011 and 2021, while the nation saw a 44% jump. 

Overall, Indiana ranked as the 36th most expensive state in terms of home insurance costs.

William Warfel, a professor within the Department of Accounting, Finance, Insurance and Risk Management at Indiana State University, said insurance companies have been pushing state regulators to accept new models for figuring loss with the hope of gaining approval for rate increases. 

Insurance is regulated at the state level, meaning the Indiana Department of Insurance must approve any rate increases. The department declined to be interviewed for this story. 

Warfel said all aspects of the insurance industry have been touched by external problems, but personal property insurance has been the most affected. 

“Property insurance is really tough, because climate change, the material component that goes to fix the roof, repair costs … that’s really where we’re seeing upward cost pressure,” Warfel said. 

These changes are likely to affect a large number of people, he added, because property insurance is basically a necessity. Any mortgage agreement, for example, typically requires the home be insured. 

What’s next?

Indianapolis broker Jamie Walton can feel his customers’ frustration as homeowners insurance costs rise. 

“It’s hard to explain to a person who has no claims why their rates are going up,” Walton said. “Everyone is expecting insurance to either stay the same or go down. But that never happens, because material costs are going up.”

Walton said that local companies sometimes pay as much as $1.63 in claims for every $1 they make in premiums and won’t look for new private insurance customers until the end of 2025. 

“Unfortunately, insurance is one big pool, and in general, claims are rising,” Walton said.

In the meantime, he recommended contacting an experienced broker if you feel the need to shop around. 

“But if you have a decent rate, sit still,” he said. 

Info Box Title
  • Why is home insurance so expensive? Insurance claims have been on the rise due to stronger, more frequent storms, and material costs for repairs remain high. 
  • What happens if your insurance leaves? A variety of insurance companies are still offering policies in Indiana. An insurance broker can help narrow options down. 
  • Do you need insurance? Most mortgage lenders require homeowners insurance. 

Contact Rory Appleton on X at @roryehappleton or email him at [email protected].