Oklahoma Insurance Market is “Wildly Distorted” with Average Premiums Over $6,100 Per Year

Oklahomans pay more for homeowners insurance, on average, than any other state, according to a new report.

Lending Tree recently analyzed insurance premiums nationwide and found the average homeowner in Oklahoma pays around $6,133 per year for homeowners insurance – more than twice the national average.

One analyst described the Oklahoma insurance market as being “wildly distorted,” warning that sky-high insurance premiums could lead to declining services across Oklahoma.

Here’s how Mike Altshuler explained the issue in a recent opinion piece in Oklahoma Voice:

The turmoil in insurance markets is a harbinger for an American economy that is built on real property…Communities that are deemed too dangerous to insure face the risk of falling property values, which means less tax dollars for schools, police, and other basic services.

Farmers, meanwhile, recently canceled 1,000 policies – roughly 2% of its customer base in Oklahoma – in response to rising wildfire risk.

Top 10 Most Expensive States for Homeowners Insurance

If homeowners insurance feels more expensive in Oklahoma than in other states, then you’re not wrong. Despite having lower-than-average home values, homes in Oklahoma are costlier to insure than homes in any other state.

States with the most expensive homeowners insurance premiums per year, on average, include:

1. Oklahoma: $6,133
2. Nebraska: $5,912
3. Kansas: $5,412
4. Texas: $5,180
5. Kentucky: $4,671
6. Colorado: $4,489
7. Mississippi: $4,201
8. Louisiana: $4,033
9. Florida: $3,889
10. Arkansas: $3,722

What’s Driving High Insurance Premiums in Oklahoma?

Oklahoma has had some of the costliest homeowners insurance premiums in the United States for multiple years in a row.

However, the average rate of $6,133 per year, based on the latest Lending Tree study, is the highest in history.

It’s not about home values: as The Oklahoman explained in 2024, it costs an average of $5,858 per year for $300,000 worth of coverage with a $1,000 deductible. The median price of a home in the United States is around $440,000, according to Redfin.

So what makes homeowners insurance so expensive in Oklahoma? United Policyholders highlighted several factors in a recent report, including:

Natural Disaster Risk: Oklahoma has some of the deadliest and most dangerous tornadoes in the United States. A single tornado can cause billions of dollars of damage across the state, causing massive losses for insurers. The four costliest states for homeowners insurance, as seen in the graph above, are Oklahoma, Nebraska, Kansas, and Texas. It’s not just about tornadoes. It’s also about hailstorms, severe winds, and wildfires.

Dense Populations: Critics point to neighboring Kansas to argue against rising rates. Kansas has similar weather to Oklahoma, but the average homeowner in Kansas pays around $1,000 less per year for homeowners insurance. According to analysts, Oklahoma’s higher population density contributes to these higher rates. While the two states face similar storms, storms have a higher chance of causing severe damage in Oklahoma.

Construction Costs: According to Oklahoma Department of Insurance Commissioner Glen Mulready, in a statement to KFOR, rising insurance costs in Oklahoma were closely tied to rising construction costs. He blamed “inflation and severe convective storms” for raising insurance premiums. Mulready insisted Oklahoma was committed to a competitive, free-market environment. However, his organization launched initiatives like Strengthen Oklahoma Homes (SOH), which provides grants to homeowners who take steps to fortify homes against storms (say, by strengthening roofs). He believes some insurers will start rewarding homeowners who invest in these initiatives.

Oklahoma Insurers “Are Basically Able to Charge Whatever They Want” Because of “Lax” Regulations: According to Mike Altshuler writing for Oklahoma Voice, homeowners who live in border towns of Oklahoma pay significantly more for homeowners insurance than those living across the state line in Arkansas, Kansas, and Texas – despite having an identical risk of natural disasters. Altshuler cites a recent research paper showing states like Oklahoma have higher premiums because “regulators are more lax in examining requests for rate increases,” which means “insurers are basically able to charge whatever they want.” The study also found homeowners in places like Enid, Oklahoma pay some of the highest rates in the United States despite having a relatively low disaster risk compared to towns in Texas, California, Florida, and other disaster-prone states.

Insurance Premiums Are Rising Less Than Average in Oklahoma

Oklahoma has the highest homeowners insurance premiums in the United States. However, the rate of increase appears to be slowing.

According to the same Lending Tree report, Oklahoma’s homeowners insurance premiums rose significantly less in 2024 than they did in other states.

The top 5 states with the highest jump in premiums in 2024 included:

1. Montana: 22.1%
2. Nebraska: 22.1%
3. Minnesota: 19.5%
4. Washington: 19.5%
5. North Dakota: 18.2%

Meanwhile, Oklahoma ranked 37th with 8.6%.

Lending Tree also tracked the total rise in premiums from 2019 to 2024, seeing how much premiums changed in a six-year period. Oklahoma ranked 15th overall.

The top 10 highest states with the largest increase in premiums between 2019 and 2024 were:

1. Colorado: 76.6%
2. Nebraska: 72.3%
3. Utah: 70.6%
4. Arizona: 70.1%
5. Minnesota: 65.4%
6. Iowa: 60.6%
7. Illinois: 59.5%
8. Montana: 57.8%
9. South Dakota: 56.8%
10. California: 55.3%

Oklahoma came in 15th with 50.8%

What Happens Next?

As mentioned above, Oklahoma lawmakers and the Department of Insurance have proposed various systems for combating high homeowners insurance premiums.

Eventually, insurers reach a point where they can only raise rates so much before leaving a state entirely. We recently saw State Farm cancel 70,000 policies in California, for example, just months before the most devastating wildfire in the state’s history.

Oklahoma could be on a similar path. According to Insurtech Insights, Farmers recently canceled 1,000+ policies across Oklahoma because of rising wildfire risk. The cancellation only impacted 2% of Farmers’ policyholders statewide, but it could get worse as wildfire and tornado risks increase.

Ultimately, homeowners in Oklahoma are continuing to pay the highest homeowners insurance premiums in the United States. However, insurers can only continue raising rates so much before something needs to change.