Matic, an online insurance brokerage, recently published its 2026 Home Insurance Report. And it suggests that, following years of skyrocketing premiums, homeowners insurance costs are beginning to increase more moderately.
"Matic’s 2026
mid-year analysis reveals that premium increases continue to moderate,
competition among insurers is returning, and — perhaps most notably — a
record number of homeowners are now seeing their insurance premiums
decrease," says Matic's report. "These trends suggest that after several years focused on
restoring profitability, many insurers are once again shifting their
attention toward growth."
Overall Costs Are Still Rising
Let's not get too carried away with the record number of decreasing premiums. Only 11.7% of homeowners saw their premiums fall during the first half of 2026. And that means 88.3% either paid the same or more.
Nationally, premiums for newly written home insurance policies increased 5.9% in the first half of this year, while those for existing policyholders rose 10.6%, according to Matic. Those are big rises (much higher than the overall consumer inflation rate of 3.4% year over year), but they're a whole lot smaller than in earlier years in the 2020s.
Matic talks about those recent years as a period defined by inflation, rising construction costs, expensive reinsurance and record catastrophe losses. And those haven't gone away, though we've gotten lucky with hurricanes recently.
"The first half of 2026 provides a clear picture. January began with a multi-state winter storm that generated an estimated $6.7 billion in insured losses," says Matic. "As winter gave way to spring, severe convective storms — including hail, tornadoes, and damaging straight-line winds — produced more than $22 billion in insured losses by mid-June alone, marking the eleventh consecutive year in which these losses exceeded $20 billion. Meanwhile, wildfire activity continued to build across the western United States, with more than 4.6 million acres burned by late July."
Shop Around and Maintain Proper Coverage
By the way, that discrepancy between the rises in premiums for new and existing policyholders should remind homeowners of the value of comparison shopping whenever a renewal is coming up. Readers must, however, be sure they're comparing like with like: the coverage one gets and the deductibles one takes on are as important as the premium one pays.
Another issue raised by Matic is the likelihood that up to 75% of U.S. homes are likely underinsured. In other words, faced with a rebuilding project, most homeowners won't have a high enough insurance payout to complete the work without raiding their savings — if any. Be sure to increase coverage in line with rising repair and construction costs.
AI Helps Insurers Limp Back to Profitability
One way insurers are cutting some homeowners' premiums is by getting better at identifying and assessing risk. Time was when most homeowners insurance quotes were based on the insured's profile and the home's location, age and claims history.
Now, helped by AI, insurers can build a much more sophisticated risk profile. They still look at those old factors, but they can now add things like overhanging trees, vulnerable vegetation close by, maintenance issues visible from satellites and Street View, how exposed the home has been to previous weather hazards, whether wildfire or flood threats are close by, and similar risks that apply to an individual home rather than a neighborhood or area.
By applying new technologies, insurers can help low-risk policyholders with low-risk homes pay less. But of course, homeowners who present a higher home insurance risk will likely pay more.
Insurance Affecting Home Affordability
Another study was published last week, this time from the Kinder Institute's Center for Housing and Neighborhoods. While the research applies only to the Lone Star State, many homeowners across the nation may recognize the trends.
"'Homeowners insurance has become an increasingly important part of the housing affordability conversation because median insurance costs have increased at a higher rate than home purchase prices," reported associate director of research Steve Sherman in a summary of the report on Rice University's website.
"Researchers estimate about 7 million Texas households, roughly 64% statewide, cannot afford the median-priced home in their county," the summary continues. "Between 2009 and 2024, premiums rose 74%, while median household income increased just 11%."
So, at least in Texas, homeowners insurance premiums have risen so fast that they now sometimes determine whether or not someone can afford to buy a particular home. Let’s hope the trends Matic is seeing make their way quickly to Texas and other parts of the country where rising insurance costs are making it harder to afford a home.
