ICE Mortgage Technology has released its September 2025 ICE Mortgage Monitor Report, detailing ongoing increases in property insurance costs and their effect on mortgage affordability across the United States.
The report found that average property insurance payments for mortgaged single-family homes rose 4.9% during the first half of 2025. While this is below the 7.3% increase seen in the same period last year, it still marks a new high for property insurance expenses.
Compared to the previous year, average costs are up 11.3%, or $20 per month. The typical single-family mortgage holder now pays nearly $2,370 annually for property insurance, which represents 9.6% of total mortgage-related expenses, including principal, interest, taxes, and insurance.
According to recent data from Verisk, the global modeled insured average annual property loss (AAL) from natural catastrophes reached $152 billion in 2025, signaling a shift in the risk landscape for insurers. This figure reflects a significant increase in catastrophe-related claims, driven by factors such as inflation, urban growth, and climate change.
Over the last five years, insured losses have averaged $132 billion annually, up from $104 billion in the previous five-year period, indicating that the insurance sector is facing sustained, higher-impact losses from disasters.
“As property insurance costs continue to climb and account for a larger share of monthly mortgage expenses, homebuyers and homeowners are facing increased affordability pressures,” said Tim Bowler (pictured above), president of ICE Mortgage Technology. He noted that these trends underscore the need for better data and connectivity in the market.
The cost per $1,000 of property insurance increased by $0.29, or 5%, from last year and has climbed $0.85, or 16%, since 2022. This trend indicates that rising insurance costs, not just higher home prices, are contributing to increased expenses for homeowners.
Property insurance remains the fastest-growing component of mortgage payments, rising 11% year-over-year, compared to 8% for interest, 5% for property taxes, and 1% for principal. Over the past five and a half years, average property insurance payments have surged nearly 70%, outpacing the growth in principal, interest, and taxes, each of which rose by about 23% to 27%.
Some markets experienced a decline in the cost per $1,000 of insurance during the first half of 2025. Average total premium costs dropped slightly in El Paso, Texas, and three Florida markets – Cape Coral, North Port, and Miami – after adjusting for coverage changes.
Borrowers in high-cost regions such as Florida and the Gulf Coast saw smaller increases, and in some cases, decreases in premiums, though these areas continue to report some of the highest insurance costs in the nation.
Conversely, property insurance costs rose sharply in California. In Los Angeles, average insurance prices increased 9% in the first half of the year and nearly 20% compared to the previous year, with wildfires cited as a major factor.
Other California cities, including San Diego, Oxnard, Bakersfield, Riverside, and San Francisco, saw increases of more than 8% in the first half of 2025 and year-over-year jumps ranging from 15.9% to 19.9%. North Carolina and South Carolina, both affected by flooding last year, also reported significant increases.
The impact of natural disasters has been particularly evident in the wake of the 2025 Palisades and Eaton wildfires in Southern California, which resulted in up to $65 billion in economic losses, with 60–70% of those losses insured.
Legislative changes in Florida aimed at reducing insurance-related lawsuits and encouraging private insurers have led to a notable drop in the number of homeowners on state-backed insurance plans.
At the start of 2024, about 25% of Florida’s single-family mortgage holders were on state-backed plans; that figure has since fallen to 16%. In Miami, the share dropped from 46% to 27%. However, states like California and North Carolina have seen record-high reliance on state-backed policies as insurance prices rise.
Despite recent increases, California continues to have some of the lowest insurance prices among major U.S. markets, with cities like San Jose, Stockton, San Francisco, and Fresno ranking in the bottom 30% for cost per $1,000 of coverage. In contrast, every major market in Louisiana and Florida remains among the 22 most expensive.
Markets prone to hurricanes, such as New Orleans, Miami, Tampa, Cape Coral, and Palm Bay, as well as Midwest cities like Oklahoma City, Omaha, Tulsa, and Wichita, are among the top eight for insurance costs due to higher risks of wind and hail damage.
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