Americans continue to feel the sting of rising prices. As measured by the Consumer Price Index, inflation is up 8.3% over the past 12 months. But some costs are increasing much faster.

Take homeowners insurance premiums. The cost to insure your home is up 12.1% on the year, according to Policygenius. And depending on where you live, things may be even worse: Homeowners in three states have seen their premiums rise at more than double the pace of inflation.

Additionally, rising costs of building materials means that things could be more expensive than expected if you actually have to use your insurance.

“It’s a two-tailed effect,” says Pat Howard, managing editor and licensed property and casualty insurance expert at Policygenius. “Not only are premiums getting more expensive, but with replacement costs going up, you could end up underinsured as a result.”

Here are the 10 states where home insurance premiums have seen the largest year-over-year increase, according to Policygenius.

1. Arkansas: 18.5%
2. Washington: 18.1%
3. Colorado: 17.5%
4. Texas: 16.0%
5. Oregon: 15.4%
6. Arizona: 14.8%
7. Utah: 14.1%
8. Minnesota: 13.9%
9. North Carolina: 13.7%
10. Illinois: 13.6%

Arkansas’ pace-setting increase amounts to a $228 hike to the average annual premium from 2021, bringing the average annual cost for a policy up to $1,235.

The largest increase in terms of raw dollar amount belongs to Oklahoma, with Sooners forking over $257 more per household than they did in 2021. The smallest increase belongs to New York, whose residents saw a bump of $57.

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Property insurers were already looking for rate hikes prior to Hurricane Ian hitting the Gulf Coast of Florida last month and big losses from the storm look likely to make a difficult renewal for commercial policyholders even worse.

While many of the losses from Ian, which various modelers say could result in more than $50 billion in insured losses, will hit auto and homeowners insurers hard, commercial insurers operating in Florida are also expected to pay significant amounts in storm-related claims.

In addition, reinsurers, which support insurers operating nationwide, are expected to see big losses and will pass on some of those costs to insurers and ultimately policyholders through higher rates at Jan. 1 renewals, according to insurance industry executives attending the Insurance Leadership Forum in Colorado Springs last week.

The conference, organized annually by the Washington-based Council of Insurance Agents & Brokers, is a key market meeting that draws top executives from insurers, brokers, reinsurers and other industry companies.

“The property market, particularly property cat, was already in a massive transition where everyone was expecting 1/1 to be a difficult date,” said Mike Karmilowicz, New York-based CEO of Everest Insurance, a unit of Everest Re Group Ltd.

Changes in terms and conditions for reinsurance will likely have a negative effect on available insurance capacity, he said.

Prior to the storm, property rates were expected to rise, said Mike Rice, CEO of CAC Specialty.

“A lot of people were saying they thought rates probably were going to go up 10 points, but after Ian maybe it’s 20 points,” he said.

“There’s clearly a prognosis that the market is going to get more disruptive as we go into 2023,” said Kevin Smith, president of global risk solutions, North America, at Liberty Mutual Insurance Co. “Capacity is going to be very, very valuable and who’s going to deploy it and where is yet to be determined, but it’s fair to say it’s going to be a tumultuous market.”

Year-end renewals were looking difficult before Hurricane Ian struck and losses from the storm likely mean that renewals will be even tougher for reinsurance cedents and primary insurance buyers, said Mike Kerner, CEO of Munich Re Specialty Insurance, a Princeton, New Jersey-based unit of Munich Reinsurance Co.

Higher demand for catastrophe coverage as valuations have increased due to inflation, the strength of the dollar reducing available U.S. capacity for some overseas insurers, and climate concerns were already putting pressure on the market, he said.

Already some insurers are making changes in pricing, said Neil Kessler, Dallas-based president and chief operating officer of CRC Insurance Services Inc.

The property market will continue to be challenging in all states, said Paul Smith, Parsipanny, New Jersey-based senior vice president, carrier relations, at H.W. Kaufman Financial Group Inc.

Little new capacity is entering the market, he said. In addition, “Existing insurers are looking to make sure that they deploy their capital in a very careful and methodical way,” he said.

Hurricane Ian is shaping up to be the costliest Florida hurricane since Andrew in 1992. Wind and storm surge damage in the state are estimated between $28 billion and $47 billion dollars, according to a Sept. 29 estimate from CoreLogic. With that level of destruction, property owners are advised to make any claims to insurance quickly.

“The problem with hurricanes is that hundreds of thousands of people can be affected, so it may take time to get the help you need,” said certified financial planner Carolyn McClanahan, founder of Life Planning Partners in Jacksonville, Florida, who experienced the impact of Ian directly.

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