U.S. property insurance costs surged 4.9% in the first half of 2025, reaching a new record high, with homeowners in hurricane- and wildfire-prone states facing the steepest increases, according to Intercontinental Exchange (ICE) Mortgage Monitor.
The report found that the average annual property insurance payment for single-family mortgage holders now stands at nearly $2,370, representing 9.6% of total monthly mortgage-related costs when including principal, interest, taxes, and insurance. Since the pandemic, property insurance expenses have skyrocketed over 70%, outpacing increases in principal (+23%), interest (+27%), and property taxes (+27%).
Andy Walden, head of Mortgage and Housing Market Research at ICE, noted:
“That rapid escalation now means insurance alone consumes almost one in every ten dollars spent on average mortgage-related costs. Property insurance costs continue to be the fastest-growing component of mortgage payments among existing homeowners.”
The report highlighted regions heavily impacted by climate events. North and South Carolina saw sharp rises in the first half of the year following flooding from Hurricane Helene, while California, affected by early-year wildfires, experienced increases of 9% for H1 2025 and 20% compared to mid-2024.
For insurers like American International Group (AIG) and Allstate (ALL), higher premiums may boost revenue, but the increasing frequency of climate disasters also raises their risk exposure, signaling long-term challenges for the industry.
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