ICE Mortgage Monitor: Property Insurance Costs Rise 8.7% Annually
(Image courtesy of Nico C via pexels.com)
Property insurance costs reached another record high in the second quarter, but the pace of growth is beginning to moderate, according to the latest ICE Mortgage Monitor Report.
Homeowners who shopped for insurance coverage found meaningful opportunities to save, the report said.
“Property insurance has been a fast-growing component of the monthly mortgage payment, but this quarter’s data shows the pace of increase is finally slowing,” noted Andy Walden, head of mortgage and housing market research at ICE. “The 1.8% quarterly gain we saw in Q2 is the smallest since we began tracking this metric. At the same time, borrowers who shopped around saw real savings. Those who switched carriers cut their premiums by a record 6.6%, while also securing lower deductibles and more coverage than those who stayed put.”
Key findings from the September Mortgage Monitor include:
• Property insurance now accounts for 9.6% of the average monthly mortgage payment
The average single-family mortgage holder now pays a record $209 per month for insurance, nearly 80% more than at the start of 2020. The burden varies widely by market, ranging from 24.3% of the average mortgage payment in New Orleans to just 4.3% in San Jose.
• Property insurance costs rose 8.7% annually, but the pace of growth is slowing
Cost increases have eased from 11.4% at the start of the year and a peak of 15.1% at the end of 2024. Coverage limits, which are up 5.5%, accounted for roughly two-thirds of the past year’s increase, while the cost per $1,000 of coverage rose 3%. This is a reversal from 2024, when repricing drove the majority of cost growth.
• Insurance cost trends diverge sharply across the country
Some of the largest annual increases were seen in Greenville, S.C. (+15.8%); Honolulu (+14.7%); Minneapolis (+13.1%); and Sacramento and San Diego (roughly +12%). The report noted that many of the fastest increases are occurring in markets affected by recent hurricanes, wildfires and hail. “Meanwhile, Miami and New Orleans — the nation’s two most expensive insurance markets — saw among the smallest annual increases,” ICE said.
• Switching carriers produces significant savings for homeowners
Homeowners who switched between private carriers over the last year reduced their insurance payments by a record 6.6% on average, the largest savings since ICE began tracking that data in 2013. By contrast, those who stayed with their existing carrier saw premiums increase by 10.4%. Switchers saved $440 a year compared to their counterparts, while also maintaining favorable terms, with deductibles falling 1.4% and coverage limits increasing 7.3%. More regional savings trends can be found in the full report.
