A new report sheds light on a growing burden homeowners can't afford to ignore
Home insurance premiums for new policies increased 9.3% in the first half of 2025, reaching an average of $1,966, according to a mid-year report from digital insurtech platform Matic. The report analyzed data from millions of quoted and insured properties, revealing continued affordability challenges for homeowners nationwide.
Premium growth outpaces coverage value
Since 2022, premiums for new policies have surged 45% while Coverage A has grown less than 12%. This disparity means homeowners pay significantly more for proportionally less coverage protection.
“In some cases, homeowners are now spending more than half of their monthly mortgage payment on insurance and taxes,” said Ben Madick, CEO and co-founder of Matic. “An increasing number of people are finding that rising insurance costs are standing in the way of buying a home or making it harder to keep the one they have.”
Climate events drive regional premium spikes
Climate volatility continues influencing market conditions beyond traditional coastal hurricane zones. Convective storms bringing hail and tornadoes now account for 70% of global insured losses in recent years, driving double-digit premium increases in states like Colorado, Mississippi, and Texas.
The report notes that “Tornado Alley” is shifting eastward, exposing Southeast and Midwest regions previously considered low-risk to increased tornado activity. This geographic shift complicates risk assessment for insurers as historical data no longer accurately represents future threats.
Deductibles increase as coverage options expand
Average deductibles rose 24.5% year-over-year as insurers shift more financial responsibility to homeowners. Many policies now include separate percentage-based deductibles for wind and hail damage, often 1% to 5% of home value.
Roof age has become a critical pricing factor, with the premium gap between homes with newer roofs versus those 11-15 years old tripling since 2022 to $155.
Federal tariffs add cost pressures
Federal tariffs on copper, steel, and aluminum contribute to rising insurance costs as material price increases raise replacement costs. The National Association of Home Builders estimates tariffs could add nearly $11,000 to new home construction costs.
Market shows signs of improvement
Despite challenges, available insurance quotes per person increased 69% between March 2024 and July 2025. The Excess & Surplus market now represents 17% of Matic’s policies in California, Florida, and Texas, up from less than 2% two years ago.
The mortgage industry feels insurance market impacts, with 64% of surveyed lenders reporting frequent or somewhat frequent insurance-related issues affecting loan closings over the past year.
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