Date Published: June 2026
After five consecutive years of steep increases, homeowners’ insurance premiums are finally showing signs of slowing growth. According to a recent Rate Insurance analysis of more than 265,000 homeowner policies nationwide, insurance premiums increased by an average of 9.2% in 2025—still significant, but the first deceleration in annual premium growth since 2019.
“After several years of sharp increases, we’re starting to see early signs that the market is stabilizing,” said Jeff Wingate, President of Rate Insurance. “Premiums are still elevated, but this shift gives homeowners a window to reassess their coverage and take a more proactive approach to managing long-term costs.”
Why It Matters to Lenders
Homeowners insurance remains a critical component of monthly housing payments and debt-to-income calculations. While insurance costs continue to rise, the slower pace of increases may help ease affordability concerns for some borrowers, particularly in markets where insurance premiums have become a significant obstacle to qualification.
What’s Driving Claims?
The study found that water and wind-related damage account for 86% of all homeowners insurance claims. While frequent, these losses are relatively moderate in size, averaging:
- Water Damage: $20,000 per claim
- Wind & Hail Damage: $14,000 per claim
Fire and lightning claims tell a different story. Although they represented only 4.7% of claims in 2025, they accounted for nearly half of all insurance payouts. The average fire-related claim reached $341,000, heavily influenced by the devastating California wildfires earlier this year.
States with the Highest Premiums
Markets facing ongoing exposure to severe weather continue to experience the highest insurance costs. The highest average annual premiums in 2025 were reported in:
- Colorado — $3,392
- Texas — $3,343
- Oklahoma — $3,135
- South Dakota — $3,040
- Florida — $2,946
Mortgage Professional Takeaway
As housing affordability remains a key concern for borrowers, insurance costs deserve a place in every mortgage conversation. While premiums remain elevated, the slowing rate of increase could provide some welcome stability heading into the second half of 2026.
https://www.scotsmanguide.com/news/homeowners-insurance-premiums-see-first-deceleration-since-2019
By: Bretta Watkins
