Insurance Premiums Spiked In 2024
Homeowners were hit hard by rising property insurance rates last year, according to new data from ICE.
The average annual property insurance premium jumped $276, up a record 14%, to $2,290 in 2024. That’s in addition to an increase of 61% over the five years previous.
Seattle (+22%), Salt Lake City (+22%), and Los Angeles (+20%) saw the largest percentage increases last year, while Dallas and Houston homeowners shelled out the most by dollar amount, at $606 and $515 respectively.
Florida, known for a tough hurricane insurance market, only saw premiums inch up by less than half the national average. But Florida homeowners already have some of the highest costs in the country, and they remained near the top of the list.
“While it’s no surprise that insurance costs are rising, we’re beginning to see emerging trends in terms of how homeowners are responding to the higher cost environment,” said Andy Walden, Head of Mortgage and Housing Market Research for Intercontinental Exchange.
Buyers and homeowners alike are shopping around. A record 11.4% of borrowers changed to a new insurance carrier last year, the result of both increasing nonrenewal activity and borrowers switching companies.
Homeowners are also accepting higher deductibles for affordability purposes, a scenario that could leave many Americans financially stranded in the event of an emergency.
Natural disasters are becoming increasingly common across the U.S., but especially in hurricane- and fire-prone areas.
“Lenders need to build these higher insurance rates into their underwriting when they’re qualifying a borrower for a mortgage loan – in some markets, insurance and tax payments are almost as expensive as principal and interest payments,” President and CEO of CJ Patrick Company Rick Sharga told The Mortgage Note.
“And mortgage servicers should be on the lookout for unexpected delinquencies from borrowers who’ve been blindsided by soaring premium costs. In some cases – especially where borrowers barely qualified for a loan – these homeowners may find that they can simply no longer afford to make their monthly mortgage payments due to rising insurance costs and property taxes.”