Homeowners Paying More for Insurance Than Property Taxes in Almost One Third of U.S. States

New data from LendingTree indicates that homeowners in 15 U.S. states now pay more for property insurance than for property taxes, a shift driven by climate-related disasters and rising repair costs. While insurance typically accounts for 8.5% of a monthly housing budget, its growing financial weight is significantly impacting consumer buying power in high-risk markets. This trend underscores a pivotal change for the property insurance sector as premiums become a primary consideration in homeownership affordability.

According to a report by LendingTree, homeowners in 15 states—including Alabama, Arizona, Arkansas, Colorado, Idaho, Kentucky, Louisiana, Mississippi, Nebraska, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, and West Virginia—now face insurance premiums that exceed their property tax obligations. Nationally, the typical homeowner spends approximately $311 on property taxes and $200 on insurance monthly, but this balance is flipping in nearly a third of the country. Colorado currently sees the highest unweighted monthly premiums at $463, a figure driven by extreme weather risks such as hailstorms and wildfires, while Montana and Virginia homeowners spend equal amounts on insurance and taxes.

LendingTree Insurance Analyst Rob Bhatt stated that insurance has moved from being an afterthought to having an outsized influence over people’s buying power. The surge in premiums is attributed to climate change-driven natural disasters and a subsequent increase in claims, which often results in insurers raising rates across entire markets rather than just in afflicted areas. Additionally, inflation has significantly increased the costs of home-building materials and labor required for home repairs, further pressuring the insurance industry and increasing the percentage of the typical housing budget consumed by insurance costs.

There are emerging signs of potential market stabilization, as the pace of insurance rate increases slowed to 5.9% in 2025, compared to 10.7% in 2023 and 12.5% in 2024. The report identifies homeowner behavior as a key factor in managing these costs, with more consumers shopping around before policy renewals or making home upgrades to lower their bills. Despite these efforts, insurance remains a dominant factor in housing budgets, particularly in states like West Virginia where, despite ranking 12th on the list of states where insurance exceeds taxes, high poverty rates make insurance costs a significant portion of the monthly housing budget.