Property insurance costs reached another record in the second quarter, adding pressure to borrowers’ monthly housing payments even as the pace of premium growth slowed.
The average mortgage holder with a single-family home paid $209 a month for property insurance, up 8.7% from a year earlier and nearly 80% since the beginning of 2020, according to the September ICE Mortgage Monitor.
Insurance now represents 9.6% of the average monthly mortgage payment. For loan originators, that makes an accurate insurance estimate increasingly important when calculating a borrower’s debt-to-income ratio and purchasing power.
The report also identifies one possible source of savings: comparing carriers.
Homeowners who switched between private insurance carriers during the past year reduced their premiums by an average of 6.6%. Those who stayed with the same carrier saw their premiums increase by 10.4%.
Switchers saved $440 a year compared with those who stayed, a difference of nearly $37 a month. That amount will not change every credit decision, but it could help borrowers who are close to a qualification limit.
“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,” said 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.”
Savings Did Not Come With Less Coverage
Homeowners who switched carriers did not appear to save by accepting less protection, according to ICE.
Their coverage limits increased by an average of 7.3%, while their deductibles declined 1.4%. That finding is particularly relevant in the mortgage process, where a policy must meet the lender’s coverage requirements.
“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,” Walden said.
ICE’s figures cover existing mortgage holders who changed private carriers. They do not establish that every purchase borrower can achieve the same savings, particularly in markets where carriers have limited new policies or withdrawn coverage.
Still, the difference shows why insurance should be addressed before the final stages of a transaction. A generic estimate may understate the borrower’s actual payment, while a high initial quote may not reflect the most competitive coverage available.
The findings also support efforts to bring insurance comparisons into the origination workflow. In May, The Mortgage Collaborative partnered with The Zebra to give participating lenders access to an insurance marketplace with quotes from more than 110 carriers.
Costs Vary Widely By Market
Although annual premium growth slowed from 11.4% at the beginning of 2026 and a peak of 15.1% at the end of 2024, the improvement has not been evenly distributed.
Some of the largest annual increases occurred in markets affected by hurricanes, wildfires, and hail:
- Greenville, South Carolina: 15.8%
- Honolulu: 14.7%
- Minneapolis: 13.1%
- Sacramento, California: approximately 12%
- San Diego: approximately 12%
Miami and New Orleans, the country’s two most expensive insurance markets, recorded some of the smallest annual increases. But slower growth does not mean their insurance is inexpensive.
Insurance accounts for 24.3% of the average mortgage payment in New Orleans, compared with 4.3% in San Jose, California, according to ICE.
Higher coverage limits accounted for roughly two-thirds of the nationwide increase during the past year. Coverage limits rose 5.5%, while the cost per $1,000 of coverage increased 3%. In 2024, insurer repricing accounted for most of the growth.
Another Variable In A Supposedly Fixed Payment
NMP reported in October 2024 that insurance accounted for 9.4% of monthly mortgage obligations and had risen 52% since early 2020. Insurance now represents 9.6% of the payment, and the cumulative increase since 2020 is approaching 80%.
Principal and interest remain stable on a fixed-rate mortgage, but property taxes and insurance can continue to push the total payment higher.
For purchase borrowers, obtaining property-specific insurance quotes earlier can provide a more reliable qualification figure and reduce the risk of a late payment increase. Where multiple carriers are available, comparing policies may also lower the amount included in the borrower’s monthly housing expense.
The $440 average savings ICE identified is not a universal solution. But with mortgage rates, home prices, taxes, and insurance all weighing on affordability, it is one cost originators may be able to help borrowers address before it threatens the closing.
