Annual property insurance costs for mortgaged single-family homes rose by a record $276 (or 14%) to $2,290 in 2024, per the latest Intercontinental Exchange (ICE) Mortgage Monitor Report released Monday. The report also said that average premiums are now up 61% over the past five years.
Locations that saw the largest percentage increases in 2024 were Seattle (+22%), Salt Lake City (+22%) and Los Angeles (+20%). Dallas (+$606) and Houston ($515) saw the largest increases by dollar amount.
In spite of having some of the highest property insurance rates in the country, Florida premiums increased by less than half the national average on a percentage basis, ICE reported.
“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,” Andy Walden, ICE’s head of mortgage and housing market research, said in the report. “We’re seeing increases in both the share of borrowers switching policies and borrowers taking on higher deductibles as a way to combat rising premiums.
“ICE loan-level data shows that a record 11.4% of borrowers switched insurance providers in 2024, up from 9.4% in 2023 and less than 8% historically,” Walden added. “While this has undoubtedly been driven by rising non-renewal rates, it may also be a sign of borrowers switching providers in search of lower premiums.”
Markets with the highest insurance costs and high nonrenewal activity have the highest percentage of borrowers switching providers. In Miami, nearly 25% of mortgage holders switched insurance providers in 2024, followed by New Orleans and Orlando (each at 23%).
While borrowers who switched tended to save money, California is an exception to the rule. Borrowers who switched providers in San Diego, Sacramento, San Francisco, Los Angeles and San Jose all paid at least 15% more, on average, than those who stayed put with their providers.
“The average borrower switching policies in Miami paid slightly more, but in most markets with higher-than-average turnover, borrowers who switched are paying less than those that stayed put,” Walden said. “For example, in Jacksonville, Dallas, San Antonio and Denver, homeowners who switched paid at least 10% less, on average, than borrowers who remained with their old carrier.”
Homeowners who took out mortgages in 2024 had a 19% ($390) higher deductible than the average single-family mortgage holder. This coincides with separate research from the ICE climate team suggesting that borrowers taking out mortgages in recent years may also be taking on higher deductibles to help offset rising premiums.
Wildfire victims at risk
Given the Los Angeles fires that occurred in January, ICE reported that an estimated 680 homeowners located in or near the Eaton and Palisades wildfire zones fell behind on their January mortgage payments. This includes 3.5% of homeowners in the Eaton fire perimeter and 3.2% in the Palisades perimeter.
With the fires beginning after many January mortgage payments had already been made, larger impacts are expected to be seen in February mortgage payment activity.
Through Feb. 20, roughly one in six borrowers in the Eaton perimeter and nearly one in four in Palisades were slower to pay than in December. This suggests as many as 3,200 homeowners could be at risk of missing their February mortgage payments.
