Why Homeowners Insurance and Property Taxes Are Rising in 2026

Owning a home comes with many ongoing and fluctuating expenses but homeowners insurance and property tax bills can be especially difficult to predict. This is important for homeowners because even if the principal and interest portion of your mortgage stays the same, increases in insurance or taxes will raise your total monthly housing payment.

Recently, homeowners across the country are increasingly paying more for both expenses. A 2026 report from the U.S. Government Accountability Office found that average homeowners insurance premiums increased by 3% cumulatively nationwide from 2019 to 2024, after adjusting for inflation. In some southern coastal areas, premiums increased by 25% or more cumulatively over the same period.

Property taxes are rising as well. ATTOM, a data company, found in its 2025 property tax analysis that the total amount of property taxes levied on single-family homes increased by 3.7% from 2024 to 2025. The average property tax bill for a single-family home increased by 3% to $4,427.

Many factors can cause these costs to rise. Insurance premiums may increase because of severe weather, higher claim costs and rising construction and repair expenses. Property tax bills may increase when a home’s assessed value rises, a local tax rate changes or a community needs more revenue to pay for public services. Be prepared to budget for increases.

Insurance Costs Are Going Up

Insurance premiums can rise for several reasons. The U.S. Department of the Treasury found that average premiums increased 8.7% faster than inflation from 2018 to 2022. It also found that premiums and policy nonrenewal rates were higher in ZIP codes with greater expected losses from climate-related hazards.

Repair costs also affect insurance prices. A 2026 LendingTree analysis found that rising costs for labor, materials and repairs are among the main reasons homeowners insurance rates have increased. When it costs more to replace a roof, repair water damage or rebuild a home, insurers face higher claim costs, which can lead to higher premiums.

Homeowners in some states SUN serves saw particularly large increases in 2025. In Illinois, the average cost of homeowners insurance rose 18% in 2025, the largest increase among the states SUN serves, according to Insurify’s national analysis.

The National Association of Insurance Commissioners says a homeowner’s insurance premium may also depend on:

• Where you live
• Your past insurance claims
• The cost to replace your home and belongings
• Your deductible
• The age and condition of your home, construction materials and roof
• Whether an older home has updated heating, plumbing, wiring and roofing

Homeowners insurance and flood insurance are separate types of coverage. Most homeowners’ policies do not cover flood damage, so a separate flood insurance policy is generally needed, according to the National Flood Insurance Program. Review your policies or ask your insurance agent what each one covers.

Insurance Companies Are Checking Homes More Closely

Insurance companies may inspect a home before issuing or renewing a policy. According to Insurify, they may use drones, aerial photos, satellite images and artificial intelligence to evaluate properties.

These tools can identify concerns such as aging roofs, overhanging tree limbs, debris and chimney issues. Homeowners may not learn that their property was reviewed until they receive a request for repairs or a notice that their policy will not be renewed.  If that happens, United Policyholders recommends contacting your insurer to ask why it is taking action. The organization also recommends asking:

• To see the photos and when they were taken
• How to correct information that is outdated or inaccurate
• Whether repairs or other steps could lead the insurer to reverse its decision

Requirements and deadlines vary by insurer and state. For help understanding a cancellation or nonrenewal notice, contact your state insurance department through the National Association of Insurance Commissioners.

Why Property Taxes Are Rising

Property taxes help pay for schools, roads, police and fire departments and other local services. Your bill is generally based on your home’s assessed value and the local tax rate. The assessed value is the value your city or town uses to calculate your property taxes.

Property tax bills vary widely across the country. According to ATTOM’s 2025 property tax analysis, three states served by SUN were among the five states with the highest average property tax bills for single-family homes:

• New Jersey: $10,499
• Connecticut: $8,901
• Massachusetts: $7,904

Your city or town may reassess your home and determine that its value has changed. If your assessed value or local tax rate increases, your property tax bill may also increase.

Office vacancies may also affect property taxes in some cities. When office building values fall, cities may collect less commercial property tax revenue. The Pew Charitable Trusts reports that researchers have found the effects on city revenue to be measurable but generally manageable. However, declining commercial values may lead some cities to consider shifting more of the tax burden to homeowners.

How Higher Costs Affect Your Escrow Account

Many SUN clients pay homeowners insurance and property taxes through an escrow account. Dovenmuehle Mortgage Inc. (DMI), SUN’s mortgage loan servicer, collects part of each monthly payment and uses it to pay these bills.

Escrow does not cause insurance premiums or property taxes to rise. It is how those costs are collected and paid.

The Consumer Financial Protection Bureau explains that when property taxes or insurance premiums change, the amount paid into escrow may also change.

For example:

• $1,500: principal and interest
• $200: homeowners’ insurance
• $500: property taxes
• $2,200: total monthly payment

If the insurance amount rises from $200 to $275, the total payment would rise to $2,275. The principal and interest portion would remain $1,500.

You may also have an escrow shortage. This means the account does not have enough money to pay the actual tax or insurance bills.

Proactive Steps to Manage Rising Costs

1. Open Your Mail

   Open and read mail and email from your city or town, insurance company and mortgage loan servicer. These notices may include changes to your taxes, insurance costs or monthly payment. They may also include repair requests or deadlines.

   If you are a SUN client, DMI reviews your escrow account. If your payment changes after a review, DMI will send you a notice that explains the change.

2. Understand Your Bill

   Review your monthly mortgage statement, especially the amounts listed for property taxes and homeowners’ insurance.

   If something does not look right, contact DMI, your insurance company or your city or town. Ask them to explain the charge and correct any errors.

3. Shop Around for Insurance

   Insurance prices and coverage can vary by company. The National Association of Insurance Commissioners recommends getting quotes from several companies, comparing similar policies and asking about available discounts.

   When comparing insurance:

   • Compare the coverage and deductible, not only the price.

   • Ask whether you qualify for discounts.

   • Find out whether bundling home and auto insurance could lower your cost.

   • Avoid a lapse in coverage by making sure the new policy is active before your current policy ends.

   A lower quote may provide less coverage or require a higher deductible.

4. Appeal Your Property Tax Assessment

   If you think your city or town’s assessment of your home is too high, you may be able to appeal it.

   Review the details listed for your home, such as its size, number of rooms and condition. Contact your local assessor’s office to learn about the appeal process and deadlines.

   You can often find this information by searching for “property tax appeal” and the name of your city or town. Also ask whether you qualify for an exemption or other property tax relief.

5. Look for Help With Repairs

   You may qualify for a grant, low-cost loan or other program to help pay for home repairs. Programs may help with roofs, heating systems, plumbing, electrical work, weatherization or safety problems. Read Financial Assistance Resources for Home Repairs to explore possible programs.

Some BlueHub SUN mortgages include a Capital Reserve Account. It may help pay for certain repairs, unexpected home costs or an escrow shortage.

Call 855.604.HOME or email info@sunhomehelp.org to learn whether you have an account and whether an expense is eligible.