Rising coverage costs are cutting deeper into household finances across the U.S.
Property insurance premiums—including auto and home coverage—have steadily increased, though at a slightly slower pace in the year through May 2025, according to internal data from Bank of America. Median payments climbed 6% year-over-year, bringing the total increase to more than 40% since mid-2020.
Today, household property insurance payments account for 5% of income, a significant burden for many families.
Who Feels the Impact Most?
- Younger generations are facing higher costs, as their stage of life often requires more space and larger vehicles.
- Geographically, nearly all states have seen similar increases, but:
- Texas and Washington reported above-average rises.
- New Jersey and Michigan experienced more modest growth.
Outlook for Property Insurance Payments
The future of insurance costs remains mixed:
- Positive signs:
- Vehicle fatality rates have declined since their post-pandemic peak.
- Car price inflation has stabilized, easing pressure on auto insurance.
- Housing price inflation has slowed, offering some relief for home insurance.
- Potential risks:
- Tariffs on cars could push vehicle prices higher, raising auto insurance premiums.
- Extreme weather events continue to drive up home insurance claims.
Bottom Line
While recent trends suggest a potential slowdown, insurance costs remain a growing strain on consumer budgets. The balance between economic factors, tariffs, and climate-related risks will determine whether households see relief—or more pressure—in the coming years.