Your Travelers homeowners insurance renewal just arrived. The number at the bottom? 18% higher than last year. You’re not alone—Travelers Companies, Inc. raised renewal premiums by that exact percentage during Q3 2025, according to A.M. Best’s latest market analysis.
Here’s what’s strange: While Travelers jacked up rates by nearly one-fifth, their total premiums in force actually declined during the same quarter. Translation? Some customers walked away rather than pay the increase. The question for 550,000+ Travelers policyholders nationwide: Should you be one of them?
Let’s break down why your homeowners insurance just got significantly more expensive, what Liberty Mutual’s parallel struggles reveal about the industry, and what you can actually do about it before your next renewal.
Why Did Travelers Raise Homeowners Insurance Rates 18%?
Three pressures explain the surge. First, catastrophic losses from hurricanes, wildfires, and severe storms have hammered insurers’ balance sheets throughout 2024-2025. Second, inflation isn’t just hitting your grocery bill—auto repair costs and hospital services (both covered in homeowners liability claims) remain above general consumer price inflation, per Bureau of Labor Statistics data.
Third, Travelers experienced underwriting losses industry-wide. When claim payouts exceed premium income, insurers have two choices: raise rates or exit markets. Travelers chose the former. Their 18% Q3 increase aims to restore what the insurance industry calls “rate adequacy”—basically, charging enough to cover claims plus overhead.
But rate increases create a feedback loop. Higher premiums push some customers to drop coverage or switch carriers, which is exactly what happened—Travelers’ premiums in force declined even as individual policy prices rose. For context, Liberty Mutual Insurance Company faces identical challenges, with underwriting losses trailing industry benchmarks over both five-year and ten-year averages, according to A.M. Best’s credit analysis.
Your Renewal Bill: What Changed Beyond the 18% Number
That 18% figure represents the average renewal increase. Your actual number could be higher or lower depending on:
- Your home’s location and risk profile. Properties in wildfire zones, flood plains, or hurricane-prone coastal areas saw steeper hikes—sometimes 25-30% in high-risk ZIP codes.
- Recent claims history. Filed a water damage claim in 2024? Expect an above-average increase even beyond the baseline 18%.
- Coverage limits and deductibles. If you increased your dwelling coverage to match rising construction costs (smart move), that compounds the rate hike effect on your final premium.
- Your state’s regulatory environment. Some states limit how much insurers can raise rates annually, spreading the pain over multiple years instead of one big jump.
One Travelers policyholder in Austin, Texas reported their annual premium jumping from $1,850 to $2,183—exactly 18%—with zero claims filed. Another in coastal South Carolina saw a $720 annual increase (23%) after a minor wind damage claim the previous year.
Liberty Mutual’s Strategy Reveals Industry-Wide Pressure
Liberty Mutual’s approach differs slightly but faces identical headwinds. While Travelers raised rates aggressively, Liberty Mutual has relied heavily on investment income to offset persistent underwriting losses. Their portfolio includes what A.M. Best describes as “elevated high-risk assets” and affiliated investments—basically, they’re betting on market returns to compensate for insurance operations losing money.
This matters for consumers because it signals systemic issues. When two of the nation’s largest property casualty insurers—Travelers with $35 billion in annual premiums and Liberty Mutual with $43 billion—both struggle with underwriting profitability, smaller regional carriers face even steeper challenges. Some are exiting states entirely (see State Farm’s recent California pullback).
Liberty Mutual is also refocusing operations. They’ve sold European and Latin American insurance units to concentrate on U.S. and select Asian markets. Fewer global distractions might improve domestic service, but it also reduces competitive pressure in international reinsurance markets that help spread catastrophic risk.
| Insurer | Q3 2025 Strategy | Consumer Impact |
|---|---|---|
| Travelers | 18% renewal rate increase | Higher premiums, some coverage restrictions |
| Liberty Mutual | Investment income offset strategy | Potential future rate hikes if investment returns falter |
3 Moves to Make Before Your Next Renewal
Shop aggressively. Loyalty rarely pays in insurance. Get quotes from at least three competitors—USAA (if you’re military-affiliated), Nationwide, and regional mutuals often undercut national carriers by 15-20%. Use the National Association of Insurance Commissioners’ tool to compare complaint ratios.
Raise your deductible strategically. Jumping from a $1,000 to $2,500 deductible typically cuts premiums 10-15%. Only do this if you have emergency savings to cover the higher out-of-pocket cost. Don’t raise deductibles on wind/hail coverage in storm-prone areas—you’ll likely file those claims more frequently.
Bundle and leverage discounts ruthlessly. Combining home and auto insurance with one carrier saves 15-25%. But verify the bundled price beats what you’d pay with separate carriers. Other stackable discounts: monitored security systems (5-10% off), new roof (10-15%), claims-free history (up to 20% over five years), and automatic payments (2-5%).
What Inflation Really Costs Your Homeowners Policy
The ugly truth about that 18% increase? Only part of it reflects actual inflation. Auto parts and medical care—two major components of liability claims—are running above general consumer inflation, but not by 18%. Construction costs, which drive dwelling coverage limits, rose about 5-7% annually in most markets during 2024-2025.
The rest comes from insurers playing catch-up. Many carriers underpriced policies for years, absorbing small losses while hoping catastrophic claims would stay manageable. That strategy collapsed when 2023-2024 delivered record insured losses from hurricanes, wildfires, and severe convective storms. Now they’re repricing risk aggressively, essentially charging for past underpricing plus current inflation plus expected future losses.
One insurance analyst told me off-record: “Insurers held rates artificially low to maintain market share. Now they’re in a three-year correction cycle. Expect 10-15% annual increases through 2026 even if inflation moderates.”
Should You Stay With Travelers or Switch?
Depends on your claims history and alternatives. Travelers maintains A++ financial strength ratings from A.M. Best—they’ll pay claims even during catastrophic events. If you’ve filed multiple claims (especially water damage or liability), switching might be difficult. Other carriers will either decline coverage or quote similar or higher premiums.
Clean claims history? You have leverage. Before canceling, get binding quotes in hand. Some states (like California and Florida) have limited insurer capacity, making coverage harder to find regardless of price. Don’t drop your Travelers policy until you’ve confirmed another carrier will accept you at a better rate.
One scenario where staying makes sense: You’ve customized coverage with endorsements (equipment breakdown, identity theft, higher jewelry limits). Recreating that coverage elsewhere takes time and might not save money after adding equivalent endorsements to a new policy.
Frequently Asked Questions
How much did Travelers increase homeowners insurance rates in Q3 2025?
Travelers raised homeowners insurance renewal premiums by 18% during Q3 2025, according to A.M. Best. Your individual increase may be higher or lower depending on your home’s location, claims history, and coverage limits. High-risk properties in wildfire or coastal zones saw increases of 25-30%.
Why are property casualty insurance premiums rising across the industry?
Three factors drive the increases: catastrophic losses from hurricanes and wildfires, inflation in auto repair and medical costs exceeding general price inflation, and insurers correcting years of underpriced policies. Both Travelers and Liberty Mutual report underwriting losses, forcing them to raise rates or rely on investment income to stay profitable.
What is Liberty Mutual doing differently than Travelers?
While Travelers aggressively raised renewal rates by 18%, Liberty Mutual relies more heavily on investment income to offset underwriting losses. Liberty Mutual also sold European and Latin American operations to focus on U.S. and Asian markets. Both strategies aim to improve profitability but affect consumers differently—Travelers customers see immediate rate hikes, while Liberty Mutual policyholders might face increases later if investment returns disappoint.
Can I negotiate my Travelers homeowners insurance renewal increase?
Limited negotiation is possible. You can’t change the base 18% rate increase (state-approved rates), but you can adjust your deductible, remove optional coverages, or ask about unapplied discounts (security systems, claims-free history). The most effective “negotiation” is getting competing quotes and switching carriers if you find better rates. Insurers rarely match competitor prices—they’d rather lose customers than undercut their rate structure.
Should I expect more homeowners insurance rate increases in 2026?
Yes. Industry analysts predict 10-15% annual increases through 2026 as insurers continue repricing risk. Even if inflation moderates, catastrophic losses and years of underpriced policies create a multi-year correction cycle. Budget for another double-digit percentage increase at your 2026 renewal, and shop competitors annually to minimize costs.
Bottom Line: Your Move
18% isn’t going away. Travelers—and competitors like Liberty Mutual—face structural pressures that won’t resolve quickly. Your best defense? Treat homeowners insurance like any other major expense. Shop annually, optimize coverage (don’t over-insure or under-insure), and maintain clean claims history when possible.
If you’re a Travelers customer facing renewal, get three competing quotes before your effective date. Use those quotes as leverage or switch if the savings justify the effort. And document your home’s condition with photos—after a rate increase this steep, you want ironclad proof of your property’s value if you ever need to file a claim.
The insurance market won’t stabilize overnight. But informed customers who actively manage their policies will pay thousands less over the next 2-3 years than those who auto-renew without question.