Kathmandu. Climate change-related losses and rising inflation have driven up global home insurance premiums in 2025. At the same time, the size of home insurance has also increased to more than $ 7 trillion.
According to Coin Law, global home insurance premiums will increase from 7 per cent to 8.6 per cent in 2025. The home insurance market is also expanding steadily. As a result, the size of the home insurance market has increased from $6.3 trillion to more than $7 trillion.
Insured losses from natural disasters are expected to reach $140 billion to $150 billion in 2025, continuing a growing trend due to evolving climate instability. Floods, wildfires and severe storms account for about 69 percent of global disaster damage. This underscores the increased risk of property insurance companies in extreme weather events.
From 2024 to 2025, the average insurance deductible rate increased by 24.5 percent. Insurance deductibles have risen in high-risk areas, such as the United States, especially as reconstruction costs have risen.
The global increase in the price of home building materials, up about 7% to 10% year-on-year, has pushed up costs for both insurers and insurers. Home insurance penetration has reached a record 96 per cent despite rising risks. This reflects its continued importance for financial security.
According to analysts, insurers globally are focusing on affordability with the need for sustainable and risk-based pricing. As climate-related losses mount, insurers around the world are tightening underwriting standards and expanding disaster models. They are modifying insurance coverage in high-risk areas.
With these adjustments, higher reinsurance costs will push premiums higher through 2026, according to Coin Law.
