In 2025, homeowners with typical single family mortgages, found themselves paying just under 10% of their monthly mortgage bill not towards principal nor interest, but for the insurance premium alone. That’s a staggering proportion, easily eclipsing what many financial experts laid out as guidelines the past years when it comes to homeownership.

Understanding What’s Fueling the Surge

Homeowners insurance costs have been steadily accelerating. Since early 2020, premiums have climbed roughly 70%, easily outpacing increases in principal, interest, and property taxes, each of which have grown by around 23 to 27% over the same period.

This surge did not happen in a vacuum. A confluence of rising rebuilding costs, escalating risks tied to climate change, an increase in litigation, and higher home valuations have pushed insure companies to raise rates. For example, a 2024 spike of about 14% was followed by forecasted increases of 10% in 2025 and 8% in 2026.

More broadly, between 2020 to 2023, real premiums leapt approximately 20%, and overall since the Great Recession, they’ve soared around 74%, while home prices rose a comparatively moderate 40%, and that's even adjusting for inflation, according to the Harvard Joint Center for Housing Studies.

A Comparison of Two Cities on Opposite Sides of the United States: Tampa Bay and Salt Lake City

National averages tell one part of the story, but regional realities can be especially stark. In Tampa Bay, for example, insurance eats up nearly 14.9% of the average mortgage payment which is well above the national average, driven by consistently high premiums, which have climbed from around $192 to $300 per month over the past decade. Florida homeowners face the highest average annual insurance rates nationwide which were $14,140 in 2024. One in five homeowners opted to go uninsured as a result, according to Axios.

Meanwhile, in Salt Lake City, the climb has been swift. Insurance’s share of mortgage payments has jumped from 4.8% to 6.8% over three years. Monthly insurance payments there have more than doubled, from $61 to $135.

These trends ripple through housing affordability. In Florida, rising insurance costs drag down demand, lengthen time on market, and deter would be buyers. In Salt Lake City, what was once a manageable cost now increasingly strains homeowners’ budgets.

The Hidden Burden for Renters Because You Are Still Paying

Here’s where the narrative becomes especially meaningful for renters. Even if you are not sending money directly to an insurance company, your monthly rent payment likely covers several obligations including your landlord’s insurance, mortgage, property taxes and more.

Studies remind us that homeowners face financial burdens that renters typically avoid: hefty insurance premiums, property taxes, maintenance costs, and more. Homeowners insurance alone averages around $2,600 per year, whereas renters insurance costs are often under $300. When you rent, that hidden cost is baked into what you pay the landlord. But, ultimately, it’s still your money being drawn away from savings or discretionary spending.