Read our full analysis for a more in-depth look at these trends.
Insurance: Climbing coverage costs cut into consumer budgets
Tariffs and changing weather patterns complicate the outlook for property insurance.
June 2025
Key takeaways
- Property (auto and housing) insurance payment growth slowed in the year through May 2025, according to Bank of America internal data. But median payments still rose 6% year-over-year (YoY) and by over 40% since the period June 2020-May 2021. This has taken household property insurance payments as a percentage of income up to 5%.
- There is a slight skew in payment growth towards younger generations, who may be at a life-stage where they need more living space and larger vehicles. Meanwhile, from a geographic perspective, most states have seen broadly similar rises in property insurance payments, though it appears the increases in Texas and Washington have been slightly larger, while New Jersey and Michigan have seen smaller ones.
- The outlook for property insurance payments is complex. For autos, two positives are that the vehicle fatality rate has declined from its post-pandemic peak, and car price inflation is currently low. But there is a risk that tariffs could increase car prices, which would put upward pressure on auto insurance payments.
- At the same time, house price inflation has slowed somewhat across the U.S., which takes some pressure off home insurance. But the outlook is complicated by the risk of continued escalation in claims caused by acute weather-related events.
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