In its research on mid-year premium trends, Matic examines significant changes in the house insurance market in the first half of 2025. The research illustrates the increasing difficulties experienced by homeowners, mortgage entities, and the larger housing market as affordability issues and coverage constraints continue, utilizing data from a dataset of Matic-quoted and insured homes.
The average premium for new home insurance policies increased 9.3% between 2024 and 1H 2025, to $1,966, according to Matic’s data. This continues a multi-year trend of high cost rise, even though it represents a decrease from the sharp increases of recent years. New policy rates have gone up by 45% since 2022, although Coverage A premiums have gone up by less than 12%. Many homeowners are consequently paying far more for comparatively less coverage.
According to the report, premium increases, particularly in areas where rate rises are the most pronounced, are exacerbating an affordability problem and making homeownership less accessible.
“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.”
According to the analysis, climatic volatility is mostly to blame for the market burden. Formerly low-risk areas of the Midwest and Southeast are now experiencing an increase in convective storms, which bring hail and tornadoes, while coastal regions have long struggled with hurricanes and flooding. In recent years, these weather catastrophes have caused double-digit premium hikes in places like Colorado, Mississippi, and Texas and have been responsible for 70% of insured losses worldwide.
Losses Mount Up
According to the analysis, climatic volatility is mostly to blame for the market burden. Formerly low-risk areas of the Midwest and Southeast are now experiencing an increase in convective storms, which bring hail and tornadoes, while coastal regions have long struggled with hurricanes and flooding. In recent years, these weather catastrophes have caused double-digit premium hikes in places like Colorado, Mississippi, and Texas and have been responsible for 70% of insured losses worldwide.
As losses mount, insurers are shifting more financial responsibility to homeowners. The report notes that the average deductible has increased by nearly 25% year-over-year, and many insurance policies are now including separate, percentage-based deductibles for wind and hail damage. Roof age and condition have also become key pricing factors, with the premium gap between homes with newer and older roofs tripling since 2022.
The paper identifies federal tariffs as an additional cause of growing insurance costs, in addition to climate-related reasons. Due to current or impending tariffs on copper, steel, and aluminum, builders are preparing for higher material costs, which could result in higher replacement costs and, ultimately, premiums.
The mortgage industry, where homeowners need to obtain coverage in order to close on a loan, is also being impacted by issues in the insurance market. According to Matic’s poll, 64% of lenders said they had experienced insurance-related problems either often or rather frequently in the previous 12 months.
“We’re hearing from lenders who are seeing closings fall through or get delayed because of insurance hurdles,” said Madick. “In today’s market, home insurance is no longer a checkbox at the end of the process. It’s a critical step that can make or break a loan, and mortgage leaders who get ahead of it are in a much better position to help their borrowers succeed.”
Despite the persistent difficulties, there are indications of progress. Many carriers started to relax the underwriting limits that had been put in place in recent years as the P&C insurance market became more profitable in 2024 and the first part of 2025. More coverage possibilities for homeowners are indicated by the 69% increase in accessible insurance quotations per person between March 2024 and July 2025, according to Matic’s statistics.
The Excess & Surplus (E&S) market is filling gaps in coverage availability, which is still below historical standards, particularly in states that are prone to disasters. As traditional carriers look to lower their exposure in high-risk areas, E&S products now account for 17% of Matic’s house insurance policies in California, Florida, and Texas, up from less than 2% two years ago.
Note: Matic’s report notes that ongoing economic volatility and climate risks continue to fuel uncertainty. Looking ahead, coordinated efforts between insurers, regulators, and other stakeholders will be essential to chart a more stable and sustainable path forward.
