The Hidden Cost of Homeownership: Why Staying Loyal to Your Insurer Could Be an Expensive Mistake
Homeowners who stayed with their insurer last year paid a steep price for that loyalty, and the gap between those who shopped and those who didn't reveals something insurers would rather you not notice.
The average mortgaged homeowner now pays a record $209 a month for homeowners insurance, or roughly $2,508 a year, according to ICE Mortgage Technology. The same research holds a finding that matters more to the typical household than the headline. Homeowners who switched insurance carriers saw average annual property-insurance costs fall 6.6%, while those who stayed put absorbed a 10.4% increase. The gap between loyal customers and shoppers is 17-percentage-point.
Loyalty has become one of the more expensive habits in homeownership.
Why Your Renewal Notice Deserves a Second Look Right Now
The timing is what makes this finding useful. Premium growth is cooling. ICE says insurance costs rose 8.7% over the 12 months ending in June, down from 11.4% at the start of 2026 and a peak of 15.1% at the end of 2024. “Property insurance has been a fast-growing component of the monthly mortgage payment, but this quarter’s data shows the pace of increase is finally slowing,” said Andy Walden, who leads mortgage and housing market research at ICE.
A cooling market is when shopping pays best. After years of repricing for disaster losses and pulling back from Florida and California, carriers that have restored their rates have reason to compete for new policyholders again. Existing customers don’t automatically share in that competition. Proving that insurers by design price newcomers more lower than renewals would take insurer-level evidence, but the ICE gap points in that direction.
On a $2,508 policy, a 10.4% increase adds about $261 a year. A 6.6% cut saves about $166. The spread between those two outcomes is roughly $426 annually, and it grows with each renewal.
Locked-In Mortgage Rates Leave Insurance Costs Exposed
Insurance now makes up 9.6% of the average monthly mortgage payment including principal, interest, taxes and insurance, matching last year’s record. Premiums run about 80% above early 2020 levels. Owners who locked in rates near 3% often treat their housing cost as fixed. Insurance, property taxes, and maintenance keep climbing anyway, eating into the advantage of that cheap loan.
Moving offers little relief. Existing home sales slowed to a 3.98 million annualized pace in August, the lowest reading of the past year. The Case-Shiller National Home Price Index reached 337.3 in July, its high for the period, which pushes up the rebuild values insurers price against. Shopping the policy is one of the few options a stuck homeowner can pull.
One catch matters. ICE’s numbers don’t prove switching caused the entire difference. Switchers may live in different areas, own different homes, or have accepted less coverage. A cheaper quote with a higher deductible or lower dwelling limit can leave an owner underinsured after a loss. Consumer advocate Clark Howard’s longstanding strategy for recurring bills applies here: see what a competitor offers new customers, then give your current provider a chance to match.
What Insurance Investors Should Track Next
For property and casualty insurers, more switching means pressure on retention, higher acquisition costs, and lower margins on books built around renewal pricing. Big personal-lines writers such as Allstate (NYSE:ALL | ALL Price Prediction) and Progressive (NYSE:PGR) disclose policies in force and retention trends. Their upcoming third-quarter earnings reports will show whether homeowners turnover is rising. Brokers and comparison-shopping platforms gain if it is.
For homeowners, the test is simple. Measure your next renewal against ICE’s 8.7% national average. Anything above it is a signal to collect quotes and compare coverage limits and deductibles line by line.
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After two decades of patrolling the dark corners of suburbia as a police officer, Rich Duprey hung up his badge and gun to begin writing full time about stocks and investing. For the past 20 years, he’s been cruising the markets looking for companies to lock up as long-term holdings in a portfolio while writing extensively on the broad sectors of consumer goods, technology, and industrials. Because his experience isn’t from the typical financial analyst track, Rich is able to break down complex topics into understandable and useful action points for the average investor. His writings have appeared on The Motley Fool, InvestorPlace, Yahoo! Finance, Money Morning, and, of course, 24/7 Wall St. He has been featured in both U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, and USA Today.
