Homeowners Approved Rate Change Falls to 1.8% as the Earned Book Keeps Rising

Minnesota's approved homeowners rate change fell from 17.8% to 1.6% in a single year. Colorado's went from 16.6% to 0.8%. North Carolina moved the other way, on a settlement signed in January 2025. All three now sit inside one countrywide average of roughly 1.8% through July 2026 (S&P Global Market Intelligence, September 2026), which is the point at which the average stops describing any of them.

S&P's series, built from Capital IQ Pro RateWatch filing data, reads 13.6% in 2024, 6.3% in 2025 and about 1.8% so far in 2026. S&P credits part of the slowdown to non-rate actions, naming higher deductibles and tiering by property age and condition. Neither of those passes through an approved rate change.

Key Takeaways

• 11.8 points of approved written rate came out of the countrywide homeowners series in two years, from 13.6% in 2024 to about 1.8% through July 2026 (S&P Global Market Intelligence, September 2026).
• About 6.6% is the calendar-2026 earned rate change that same written series implies under the parallelogram method on annual policies, roughly 3.7 times the approved figure, and it stays positive into 2027 at zero new rate.
• 8.3% against 6.3% is the gap between AM Best's 2025 approved homeowners rate change and S&P's for the same line and year, a scope artifact of a ten-state sample measured against a countrywide one.
• $16.8 billion of net underwriting income on the homeowners line in 2025, its first profit in five years, is the margin that earning lag is currently funding (AM Best, July 2026).
• June 1, 2027 is the date before which North Carolina carriers cannot file a new base rate at all, so one state's contribution to the countrywide figure is fixed by a settlement rather than by experience.

What the 1.8% Counts

An effective approved rate change is the premium-weighted effect of approved filings on the business in force at the time of approval. It is a written concept, measured at the moment a regulator signs, and it captures only price movement that arrives as a filed rate change. That definition does most of the work in this series.

How much work is visible in a second vendor's version of the same number. AM Best put the average approved homeowners increase at 8.3% in 2025 against 13.5% in 2024, two points above S&P's 6.3% for the same line and the same year. AM Best drew on the ten states with the highest 2024 homeowners direct premiums written, about 54% of the market. S&P's series is countrywide. Same construct, different state set, a two-point spread.

The 2026 reading also sits on a quiet catastrophe half-year. Aon put global insured catastrophe losses at $47 billion for the first half of 2026, against roughly $100 billion in the same period of 2025, with US severe convective storm losses near $27 billion; Gallagher Re's parallel estimates were $46 billion and $26 billion. Light loss emergence removes the pressure that produces a filing. It does not remove the need for one.

None of the dispersion is new to anyone who reads state filings one at a time. actuary.info's coverage of Texas approvals in the first quarter of 2026 and of the Illinois rate review law describes two jurisdictions running on entirely separate clocks. What is new is that the countrywide series has fallen 11.8 points while the price actually earning on an in-force book has not.

Written Rate, Earned Rate, and the Gap Between Them

Homeowners policies are annual. A change approved in March attaches to policies written from its effective date forward, and each of those policies earns over the following twelve months, so the change is still landing in earned premium well into the next calendar year. Apply the standard parallelogram assumption, annual terms with approved changes spread evenly across each year, to S&P's own numbers and the two curves separate.

Period	Approved written rate change	Written rate level index	Est. earned rate level index	Est. earned rate change
Start of 2024	–	1.000	–	–
2024	13.6%	1.136	–	–
2025	6.3%	1.208	1.125	–
2026 (through July)	1.8%	1.229	1.199	6.6%
2027 at zero approved rate	0.0%	1.229	1.226	2.2%

Calendar-2026 earned rate change lands near 6.6% on that construction, roughly 3.7 times the 1.8% approved. Hold 2027 at zero and the earned figure is still about 2.2%, because the back half of the 2025 and 2026 filings has not finished earning. These are actuary.info calculations off S&P's published written series rather than S&P figures, and they assume annual terms with effective dates spread evenly through each year.

AM Best described the same lag from the results side. "For both lines, there was significant rate momentum coming into 2024 that flowed through net earned premium in both that year and 2025, aiding bottom-line results," said David Blades, associate director (AM Best, July 2026). The homeowners line booked about $16.8 billion of net underwriting income in 2025, its first profit in five years, inside a $45.7 billion personal lines total and an industry combined ratio of 93 on $1.11 trillion of direct premiums written.

The practical consequence sits in on-leveling. Bringing calendar-2025 earned premium up to the current written rate level takes a factor near 1.092 on this series, because 2025 earned at an average rate level well below where the book is written today. An analyst who reads 1.8% as the year's rate movement understates that factor by roughly seven points, which understates on-level premium, overstates the on-level loss ratio, and returns an indicated rate need that is too high. Personal auto has the same shape, at 3.7% approved in 2025 against 9.7% in 2024 (AM Best, June 2026).

The Price Movement the Filing Does Not Carry

The other half of the gap never enters the series at all. A carrier that moves the wind and hail deductible from 1% to 2% on a $400,000 dwelling raises the insured's retention from $4,000 to $8,000. Expected loss falls, because the second $4,000 of a hail claim stops being a claim. Price per unit of transferred risk rises. Approved rate change records none of it.

Those deductibles are already large. Insurify puts average wind and hail deductibles above $7,700 in Texas, Massachusetts and New Jersey, at $6,044 in Oklahoma and $5,584 in North Carolina. In the hail-active north of Texas, 2% has become the standard percentage deductible and some carriers have moved to 3%. Tiering by property age and roof condition does the same work on the selection side, and S&P names both as contributors to the slowdown.

For ratemaking that breaks the comparability of the experience period twice. On-level premium handles the rate change; it does not handle a book whose average retention has moved, and a percentage deductible truncates exactly the small-claim frequency that dominates hail counts. Historical losses need a deductible-relativity restatement before a trend is fitted to them, or a frequency decline that is really transferred retention reads as improving risk.

In at least one state the figure is not responding to anything current. North Carolina's 7.5% increase on June 1, 2026 was set by a settlement Commissioner Mike Causey signed in January 2025, after the Rate Bureau asked for 42.2% statewide with increases up to 99.4% in some territories. "I fought for consumers and knocked them back to 7.5% increases over two years with a maximum of 35% in any territory," Causey said (NC DOI, January 2025). Beach counties averaged 15.9% in this second step, and the department put policyholder savings against the original request at $777 million.

That settlement also barred any new base rate request before June 1, 2027. North Carolina's contribution to the 2026 countrywide figure is a decision taken seventeen months earlier, and its contribution to the 2027 figure is contractually fixed at zero whatever the intervening loss experience shows. The countrywide average is not merely lagging its states. Part of it is barred from moving.