Nebraska homeowners are facing some of the nation’s highest insurance premiums, with average annual costs reaching $6,425 to $7,920 depending on the data source, representing approximately 8.6% of median household income—the second-highest burden in America.
Nebraska leads nation in insurance costs
Nebraska has emerged as the most expensive state for homeowners insurance in 2025, with multiple studies confirming this troubling trend. According to The Zebra’s July 2025 report, Nebraska homeowners pay an average of $7,920 annually for coverage, nearly three times the national average of $2,802. Bankrate data shows slightly lower but still staggering figures, with Nebraska premiums averaging $6,425 per year for $300,000 in dwelling coverage. These figures represent a dramatic increase from previous years and place enormous financial strain on Nebraska families.
The financial burden on households
The true impact becomes clear when examining the percentage of income devoted to insurance premiums. With Nebraska’s median household income of $74,590, homeowners are spending approximately 8.61% of their annual income on insurance alone. This ranks Nebraska as having the second-highest insurance burden in the nation, behind only Louisiana at 10.78%. For comparison, the national average percentage of income spent on homeowners insurance is significantly lower, making Nebraska’s situation particularly acute.
Driving forces behind the crisis
The primary culprit behind Nebraska’s insurance crisis is severe weather, particularly hail damage and tornadoes. Nebraska sits squarely in “Tornado Alley” and experienced its highest tornado count in 20 years recently. However, insurance experts note that hail causes more widespread damage than tornadoes, affecting larger areas and generating between 50% and 80% of homeowner insurance claims from severe convective storms. The state has seen a flurry of severe thunderstorms with 80+ mph winds, creating hurricane-force conditions in America’s heartland.
Dramatic premium increases continue
The trend shows no signs of abating. Nebraska homeowners insurance rates increased by 22.7% in 2024—the highest jump in the United States. Projections for 2025 indicate an additional 10% increase by year’s end. Some insurers have reported that rates have “sometimes doubled or even tripled in the last several years,” according to local insurance agents. Between 2021 and 2024, Nebraska experienced a 35% increase in premiums, far outpacing inflation.
Geographic variations within the State
Even within Nebraska, costs vary significantly by location. The most expensive ZIP code (69356) sees average annual premiums of $5,845, while the cheapest areas around Lincoln start at approximately $4,003. Major cities show considerable variation as well. Omaha residents pay an average of $4,640 annually, while Lincoln homeowners face $4,260 per year. Rural western areas like Alliance, Gering, and Scottsbluff see some of the highest rates at $5,700-$5,705 annually due to increased exposure to severe weather patterns.
Impact on credit and demographics
The insurance crisis particularly affects homeowners with poor credit, who face even steeper costs. In Nebraska, those with poor credit pay an average of $7,315 per year for homeowners insurance—62% more than those with good credit. This creates a compounding problem where financial stress leads to higher insurance costs, creating a cycle that’s difficult to break for vulnerable populations.
No relief in sight
Industry experts warn that as long as Nebraska continues experiencing severe weather at current levels, premium increases will persist. “Until we see a reduction in severity of storms, we’re going to see these rates continue to climb, unfortunately,” according to local insurance professionals. The state’s position in Tornado Alley and vulnerability to hail damage means that climate patterns will largely dictate future insurance costs. With climate change potentially intensifying these weather events, Nebraska homeowners may face continued financial pressure for years to come.
The situation in Nebraska serves as a stark warning for other states facing similar climate-related challenges, demonstrating how severe weather can transform homeowners insurance from a manageable expense into a significant financial burden that threatens housing affordability.
