Key News & Trends

1. Property Insurance Costs Reach New Highs

• The average annual premium for property insurance for mortgaged single-family homes in the U.S. rose 4.9% in the first half of 2025, hitting about US$2,370/year.

• While that’s below the 7.3% increase seen in the same period last year, it’s still putting significant pressure on homeowners’ budgets.

2. Costs Outpacing Inflation & Mortgage Components

• The rise in property insurance premiums is now the fastest growing component of mortgage-related expenses in many U.S. markets. Things like interest rates, property taxes, and principal are increasing too, but insurance is rising faster.

• In several high exposure states (California, the Carolinas, and others hit by recent flooding or wildfire), increases are sharper.

3. Disaster Exposure & Climate Change Driving Risk

• The frequency and severity of natural disasters (wildfires, storms, floods) are forcing insurers to reevaluate risk, adjust pricing, or sometimes limit exposure in certain areas.

• This includes insurers pulling back or increasing premiums in areas with repeated losses or high catastrophe risk.

4. Impact on Affordability & Homeowner Burden

• As insurance becomes a larger portion of housing costs, affordability is becoming a serious concern. Many homeowners are being squeezed—either paying much more, raising deductibles, reducing coverage, or in worst cases, going without.

• In some markets, the availability of state-backed or FAIR Plan / last-resort insurance is increasing, sometimes because private insurers are pulling back.

5. Regulatory & Market Responses

• Insurers and regulators are under pressure to improve risk modeling, increase transparency in pricing, and create incentives for mitigation (e.g. fire prevention, resilient construction).

• There is also growing interest in using technological tools, better data, and analytics to assess and manage risk more accurately.