Insurance premiums for multi-family homes in the United States have increased significantly in recent years, noticeably affecting owners' profit margins. An analysis of property operating results shows that insurance costs relative to income have increased considerably. An example property in Louisiana showed that in 2019, approximately $4.77 of every $100 earned went towards insurance. By 2025, this share rose to $9.42, even though premiums decreased slightly last year.
After five consecutive years of increases, insurance costs for multi-family homes decreased marginally by 2.2 per cent in 2025, based on a same-store analysis of CRED iQ's operating statements. This followed a 28.5 per cent increase in 2023. However, the recent relief came from a significantly higher base, meaning that insurance costs in the residential sector are still more than double what they were in 2019.
Regional Differences and Market Developments
The market easing varies regionally. In 2023, 46 per cent of residential properties experienced a premium increase of over 20 per cent. In 2025, this affected 24 per cent, while 36 per cent of owners paid less than the previous year. Markets with the strongest previous increases are now experiencing the greatest relief. For example, premiums for flats in Florida rose 2.5-fold between 2019 and 2024, by 46 per cent in 2023 alone, before falling by 9.8 per cent in 2025. In Texas, insurance rates decreased by 8.4 per cent, and in Louisiana, by 10.5 per cent last year.
This downward trend continued into the first half of 2026. Here, 59 per cent of residential properties paid less for insurance than in the first half of 2025, compared to 38 per cent a year earlier. In the Sun Belt region, 72 per cent of properties recorded lower premiums, with the average premium falling by 11 per cent. However, owners of coastal properties did not benefit from this easing. Premiums in major coastal metropolitan areas rose by 4.8 per cent in 2025, and by as much as 6.3 per cent in California. California has surpassed Florida in cumulative growth since 2019, with an index of 251 compared to 230 for Florida. Coastal regions overall (226) outperformed the Sun Belt region (221).
Discrepancy Between Rental Income and Insurance Costs
The main problem for property owners remains that income did not grow in step with increased insurance costs. For the same properties, rental income per unit rose by 27 per cent from 2019 to 2025, from $14,210 to $19,292 annually. However, insurance costs per unit increased by 115 per cent over the same period, from $339 to $778 annually. Nationally, $4.02 of every $100 in rental income is now allocated to insurance, up from $2.39 in 2019. In each of the 30 states examined, insurance costs outstripped rent increases, led by Louisiana, California, Oregon, Washington, and Texas.
- —2019: $4.77 insurance costs per $100 income (Louisiana).
- —2025: $9.42 insurance costs per $100 income (Louisiana).
- —Rent growth 2019-2025: 27 per cent ($14,210 to $19,292 per unit).
- —Insurance cost growth 2019-2025: 115 per cent ($339 to $778 per unit).
The year 2025 marked a turning point, as for the first time since 2019, rental income grew faster than insurance costs: income increased by 1.4 per cent, while insurance costs fell by approximately 2 per cent. In the Sun Belt region, rental income stagnated, but insurance fell by 7.2 per cent, representing a total relief of $65 million. This led to the net operating income falling by only 1.4 per cent instead of the expected 2.1 per cent. For lenders, the easing in the Sun Belt region is significant, particularly with regard to refinancings in 2027 and 2028. Nevertheless, residential insurance costs in this region are still more than double what they were in 2019, and they continue to rise in coastal areas. The massive peak in costs is over, but the elevated premiums have remained.
