What’s Driving Home Insurance Increases—and Why St. Louis Is in a Good Spot

By Dennis Norman, on February 5th, 2025

Homeowners in the St. Louis metro area might be hearing about skyrocketing insurance premiums, but there’s some good news—our region is in a much better position than many others. A new study from the National Bureau of Economic Research (NBER) shows that while homeowners insurance costs are up 33% nationwide since 2020, much of that increase is hitting high-risk disaster zones and areas heavily reliant on reinsurance. Unlike coastal states dealing with hurricanes and wildfires, Missouri and Illinois have far less exposure to these risks, and insurers here aren’t nearly as dependent on expensive reinsurance policies. That means while we’re seeing premium hikes, they’re not as extreme as in Florida, Texas, or California.

That said, insurance rates are still rising here, and not just because of climate-related disasters. The study points out that aging buildings—especially condos—are contributing to increased costs, as maintenance issues and structural concerns drive up claims and policy costs. This is something to watch for if you own or are looking to buy in an older community. The report also notes that inflation and supply chain issues are making home repairs and rebuilds more expensive, which insurers factor into premium pricing.

So, what does this all mean for St. Louis area homeowners? While we’re not immune to rate increases, we’re in a far more stable position than homeowners in disaster-prone states. Our insurance market is less volatile, and we don’t have the same exposure to extreme weather events that are driving massive price hikes elsewhere. Keeping an eye on property maintenance and being proactive about coverage can help keep costs in check. The full NBER report, Property Insurance and Disaster Risk: New Evidence from Mortgage Escrow Data, is available below.