September 9, 2025
Montana homeowners face steep insurance hikes due to wildfire risk and severe weather. Learn how to manage rising premiums and secure the right coverage.
Montana homeowners are facing an increasingly challenging insurance landscape as average rates increased 22.1% in 2024 according to LendingTree, though individual experiences may vary based on provider, location, and risk profile. This makes Montana among the states with the steepest premium increases nationwide. The Big Sky State's unique combination of natural risks, population growth, and regulatory environment has created a perfect storm that is reshaping how residents protect their most valuable asset.
The Montana homeowners insurance market has experienced dramatic upheaval in recent years. The average annual premium reached $3,819 in 2024, which is $1,396 higher than the national average of $2,423. This represents a significant increase from historical norms and places Montana among the more expensive states for homeowners coverage.
Several sources provide varying estimates for average costs, with Bankrate reporting $2,797 annually and NerdWallet citing $2,735 annually. Despite these variations in specific figures, all sources agree that Montana homeowners pay substantially more than the national average.
The rate increases have been particularly sharp in recent years. Home insurance prices are up 57.8% in Montana over the last six years, with a 10.0% increase in 2023 followed by the massive 22.1% jump in 2024. This acceleration in premium growth far outpaces inflation and has surprised some homeowners, underscoring the importance of regular policy reviews.
The primary factor behind Montana's insurance cost explosion is wildfire risk. Montana now ranks second nationally for the percentage of homes at risk of catastrophic wildfire damage, with over 50% of properties vulnerable. The statistics are sobering: 70% of all recorded wildfires in Montana history have occurred since 2000, demonstrating how dramatically the fire landscape has changed.
Montana has the highest percentage of properties located in areas at high to extreme risk of wildfire, with 29% of all homes in the state located in these zones. This concentration of high-risk properties has led many insurers to reevaluate underwriting guidelines in high-risk zones.
The impact on insurers has been severe. According to a New York Times analysis, homeowners' insurance was unprofitable in Montana five of the last 10 years. Three of those loss years exceeded double the best profitable years, creating sustained pressure on company balance sheets.
Insurance companies are responding to these losses by tightening underwriting standards and, in some cases, withdrawing from high-risk areas entirely. Big Sky has experienced a 93% higher wildfire risk than the rest of the nation, and according to local reporting, some major carriers have reduced new policy offerings in select high-risk regions such as Big Sky.
Montana insurance regulators are reviewing how property insurers handle coverage decisions amid rising concerns that wildfire risk is being used to limit or deny policies in areas without recent fire activity. Commissioner James Brown has warned that his office will pursue enforcement if companies are found violating state law, which bars insurers from canceling policies or refusing renewals unless there's a substantial risk of loss.
Unlike some high-risk states, Montana does not have a Fair Access to Insurance Requirements (FAIR) Plan, leaving homeowners without a state-backed insurer of last resort. This absence of a safety net means that surplus or non-admitted options may be necessary for high-risk properties. Surplus lines carriers may provide options when admitted carriers do not, though these policies are not covered by state guaranty associations and may have different regulatory protections.
Insurance costs vary significantly across Montana based on local risk factors. Rosebud, Powder River, Golden Valley, Fallon and Yellowstone counties, all in the eastern part of the state, have some of Montana's highest home insurance rates due to hail damage claims, Billings being the state's most expensive city for homeowners insurance.
Conversely, Missoula has some of the state's lowest rates, though residents in mountainous regions or outside city limits might pay significantly more due to elevated wildfire exposure.
Given Montana's unique risk profile, homeowners should focus on several critical coverage areas:
Wildfire Protection: Extended replacement cost and additional living expenses are essential, as carriers may have fireline score or brush zone restrictions. Distance to fire stations and fire hydrants can significantly impact premiums.
Winter Weather Coverage: Snow, ice dams, and frozen pipes are common concerns. Recommended coverages include water backup and sump overflow protection, along with service line and equipment breakdown coverage.
Earthquake Risk: Western Montana lies within a seismic zone, making earthquake coverage worth considering as an optional endorsement.
Rural Property Considerations: Properties with wood stoves, space heaters, or non-standard construction materials like log cabins may face coverage restrictions or higher premiums.
Montana policymakers have responded to the crisis with several initiatives. House Bill 533 requires insurers using wildfire risk scores to disclose the underlying data and methodology upon request. HB 136 allows insurers to offer premium reductions to homeowners who invest in wildfire mitigation and resilient construction, while HJ 61 tasks the Montana Legislative Council with studying the root causes of rising property insurance rates.
Given the complexity of Montana's insurance market and the rapid changes affecting coverage availability and pricing, homeowners benefit significantly from professional guidance. Covered specializes in helping Montana residents navigate these challenging market conditions, providing guidance to help homeowners understand available options and identify potential strategies to manage risk and cost. Their team understands the state's unique risk factors and can facilitate warm transfers between servicers and customers to help streamline communication and enhance customer support experiences.
Montana's insurance costs stand out even among neighboring states facing similar challenges:
Premium ranges reflect different coverage levels and methodologies across sources
The Montana homeowners insurance market faces continued pressure from climate change and development patterns. Experts predict rates could continue rising as climate change causes wildfire risks to worsen. The number of new Montana homes in areas of moderate to high wildfire risk doubled from 1990 through 2020, suggesting the fundamental risk dynamics will persist.
For Montana homeowners, the key to managing these challenges lies in understanding coverage options, working with knowledgeable insurance professionals, investing in risk mitigation measures, and staying informed about market developments. While the insurance landscape has become more complex and expensive, proper coverage remains essential for protecting what is likely most families' largest financial investment.
The state's insurance commissioner continues monitoring market practices to ensure fair treatment of consumers, while legislators work on long-term solutions. However, the immediate reality for Montana homeowners is a market where comprehensive coverage comes at a premium, making expert guidance more valuable than ever in securing appropriate protection at manageable costs.
This article provides general information about Montana’s homeowners insurance market based on available industry data as of 2025. Individual circumstances vary significantly, and premium quotes, coverage options, and policy terms differ by insurance company. Consumers should consult with licensed insurance professionals for specific coverage recommendations and current pricing. Information presented should not be considered as guaranteed outcomes or personalized insurance advice.
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*Savings claim based upon averaging actual anonymized savings data for dwelling-only insurance rates paid (from July 2023 - June 2024) by customers of two of Covered’s largest mortgage industry partners across twenty-seven (27) US states. Bundles and non-dwelling insurance coverages were excluded.
† Net Promoter Score (“NPS”)® calculation averages post-purchase customer satisfaction surveys from 9/24/2024 - 2/28/2025. NPS® is a market research metric measuring customer satisfaction with a scoring calculation that incorporates both detractor and promoter customer feedback.
Quotes are presented solely for your convenience. Savings may vary. Rates are subject to change based upon the specific coverage you select and other factors that apply to your situation. CA License #0M81402, doing business as Cubbard Insurance Solutions in California.
