Is Homeowners Insurance Tax Deductible?

Tax season always raises questions—some predictable, some surprisingly tricky. One that catches many homeowners off guard is this: Can I deduct my homeowners insurance on my taxes? It’s a reasonable ask. 

After all, insurance is a major expense, often bundled into your mortgage payment, and it plays a critical role in protecting your biggest asset.

But as with most things tax-related, the answer isn’t as straightforward as a simple yes or no. It depends on how you use your home, what kind of insurance you’re referring to, and whether any special circumstances, like a disaster, come into play.

This guide will walk you through everything you need to know, from IRS rules to lesser-known exceptions. Whether you’re a homeowner, landlord, or HOA board member, you’ll walk away knowing exactly where you stand and where the gray areas begin. 

Let’s clear the confusion and help you make smarter, more informed decisions. 

The Short Answer—Is Homeowners Insurance Tax Deductible?

If you’re looking for a quick answer, here it is: No, homeowners insurance is not tax-deductible for your primary residence. That means the premiums you pay each month or year to protect your house, whether bundled into your mortgage payment or paid separately, can’t be written off on your taxes in most cases.

That’s because the IRS classifies homeowners insurance as a personal expense, not a cost of earning income. And under current tax law, personal expenses like these just don’t qualify for deductions. But that doesn’t mean it’s always off the table. 

When the Answer Changes 

There are a few important exceptions where homeowners insurance can become a deductible expense:

• You rent out your home (or part of it)
  If you earn rental income from the property, your insurance becomes part of the cost of doing business. In this case, you may deduct the relevant portion of your premiums as a rental expense. The IRS outlines this under rules for Schedule E. 
• You run a business from home
  Have a home office that qualifies under IRS business use of home rules? You might be able to deduct a portion of your homeowners insurance based on the size of your workspace.
  
• The property is used solely for investment or rental purposes
  If you don’t live in the property at all and it’s purely used to generate income, then the premiums are generally deductible in full as a business expense. The National Association of Realtors confirms this treatment for rental and investment properties. 

What the IRS Says

The IRS makes this clear in its official guidance on tax benefits for homeowners: insurance premiums for your personal residence do not qualify for any deductions.

So while it’s disappointing for most homeowners, the silver lining is that if you’re using your property for income-generating activities, you may have options.

In the rest of this article, we’ll unpack all the situations where homeowners insurance might actually help reduce your tax bill and the ones where it won’t. Let’s take a closer look.  

When Homeowners Insurance Is Tax Deductible

While most people won’t get a deduction for homeowners insurance on their personal residence, there are clear-cut exceptions where it is tax-deductible. The key is whether your property is used to generate income or support a business. 

In those cases, the IRS sees insurance as a business expense, not a personal one.

Here are the most common qualifying situations. 

1. Rental Properties

If you rent out your home, or even just a room in it, you’re generally allowed to deduct the portion of your homeowners insurance that applies to the rental. The IRS allows this under Schedule E, which is where landlords report income and expenses related to rental properties.

For example:

• You rent out the basement suite in your home. You can deduct a percentage of your homeowners insurance based on the square footage of that unit.
• You own an entire property that’s used solely for renting. In this case, you may deduct the full insurance premium.

This deduction includes not just the main homeowners policy, but also additional coverage specific to rentals, such as landlord liability insurance. These costs are part of doing business and are treated like any other deductible operating expense.

2. Home Offices

Running a business out of your home? If you qualify under the IRS rules for business use of home, you may be able to deduct a portion of your homeowners insurance.

To qualify:

• Your home office must be your principal place of business.
• It must be used exclusively and regularly for that business.

You can calculate your deduction using either:

• The Simplified Method (set square footage rate), or
• The Regular Method, which allows you to deduct a percentage of actual expenses, including homeowners insurance.

3. Mixed-Use and Investment Properties

Own a duplex? Live in one unit and rent the other? This is what the IRS calls “mixed use.” You’ll need to split your insurance costs based on usage. The portion related to your residence isn’t deductible, but the part related to the rental is.

The same rule applies to vacation homes you rent out part of the year. The deductible amount is based on how many days the property is rented versus how many days it’s used personally. 

Types of Insurance and Their Tax Treatment

Not all insurance policies are the same when it comes to tax deductions. Some types of coverage may qualify under specific conditions, while others are almost always treated as personal expenses. 

Here’s a breakdown of how common policy types are treated by the IRS.

1. Standard Homeowners Insurance

This is your typical HO-3 policy, which covers:

• Dwelling protection (structure of the home)
• Personal property (furniture, electronics)
• Liability protection
• Loss of use coverage

If your home is your primary residence and you don’t use it for business or rental purposes, none of these coverage areas are tax deductible. The IRS considers them personal protection, and Publication 530 reinforces that homeowners insurance premiums don’t qualify for deductions.

However, if part of your home is rented or used for a qualifying business, the proportionate share is deductible.

2. Mortgage Insurance (PMI or MIP)

Private mortgage insurance (PMI) or mortgage insurance premiums (MIP) on FHA loans used to be deductible, but this deduction expired at the end of 2021. Congress has not renewed it since.

So as of now:

• PMI and MIP are not tax deductible for most homeowners.
• There’s always a chance it could be extended retroactively, so consult a tax professional if you’re filing late or amending returns.

3. Flood and Earthquake Insurance

Flood and earthquake policies are optional add-ons and generally not tax deductible for personal residences. But there are exceptions:

• If your home is damaged in a federally declared disaster, and insurance does not fully cover the loss, you may be able to deduct the unreimbursed portion as a casualty loss.
• If the property is used for business (e.g., rental), premiums for flood or earthquake coverage are deductible as business expenses.

Insurify breaks down how flood insurance deductions apply in different scenarios.

4. Mortgage Protection or Life Insurance

Some lenders offer “mortgage protection insurance” that pays off your loan if you die. Others may offer “credit life insurance.” These are not tax-deductible under any condition, because they serve as personal life insurance, not a property-related expense. 

Disaster Losses and Special Circumstances

Sometimes, life throws you a curveball—and when disaster strikes, you may find that standard insurance doesn’t cover everything. The good news? In some cases, the IRS allows you to deduct losses that aren’t reimbursed by insurance.

Casualty Losses in Federally Declared Disasters

If your home is damaged or destroyed in a disaster that the federal government officially declares, you may qualify to deduct the uninsured portion of your loss as a casualty deduction.

Here’s how it works:

• The event must be sudden, unexpected, and unusual—like a hurricane, wildfire, or flood.
  
• You can only deduct unreimbursed losses. If insurance pays for the full damage, there’s nothing to deduct.
  
• You must reduce the loss amount by $100, and then again by 10% of your adjusted gross income (AGI).

The IRS outlines these rules in Publication 547, which explains how to claim casualty and theft losses.

You report the loss on Form 4684, then transfer it to Schedule A (if you’re itemizing).

Limitations and Recent Changes

Under the Tax Cuts and Jobs Act (TCJA), only losses in federally declared disaster areas are deductible—so if your house floods, and FEMA hasn’t declared your area a disaster zone, you won’t be able to claim a deduction.

Also important:

• You must itemize deductions. If you take the standard deduction, you can’t deduct casualty losses at all.
  
• You’ll need detailed documentation, including insurance claim summaries, repair estimates, and photographs of the damage.

Uncovered Losses and Deductibles

Let’s say your insurance policy has a high deductible, or it only covers part of the damage. That gap is where the deduction comes in.

For example:

• Your home suffers $30,000 in flood damage.
  
• Insurance covers $20,000.
  
• You’re left with $10,000 in losses.
  
• You may be able to deduct a portion of that amount, depending on your AGI and itemized deductions.

IRS Topic 515 provides a helpful overview of what counts as a deductible disaster loss.

In some cases, you may be allowed to amend a prior year’s tax return to claim a loss sooner, giving you faster financial relief. 

HOA-Related Considerations

If you live in a homeowners association (HOA), your insurance situation may be more complex than a traditional single-family home. Between master policies, personal policies, and special assessments, it’s easy to wonder how any of it plays into your taxes. 

Master Insurance Policies

Most HOAs carry a master insurance policy that covers shared or common areas—think roofs, exterior walls, pools, clubhouses, or lobbies. This policy is paid for by the association using member dues. 

While it provides critical protection for the community, you can’t deduct your share of the master policy if you live in the unit as your primary residence.

However, if the property is used as a rental or investment, you may be able to deduct the HOA dues—including the insurance portion—as a business expense. This is especially relevant for condo owners renting out their units. 

Your Personal Condo or HO-6 Policy

In addition to the master policy, owners in an HOA community usually purchase their own HO-6 condo policy. This covers personal property, interior walls, liability, and loss of use. Just like standard homeowners insurance, this is not tax deductible for primary residences.

But if you’re renting the unit, this policy becomes part of your deductible operating costs, right alongside the master policy dues.

For landlords, HOA fees and insurance expenses are often deductible under IRS Schedule E, which applies to rental income and related costs. 

Special Assessments for Insurance

Sometimes, HOAs issue special assessments to cover gaps in insurance, like when a storm causes damage that exceeds the master policy’s limits. These can be expensive, and naturally, homeowners want to know if they can deduct them.

Here’s the rule:

• If the unit is your primary home, the special assessment is not deductible
• If the unit is rented out, the assessment may be deductible as a repair or operating expense, depending on what it covers

Be sure to keep a detailed breakdown of what the assessment is for. Only business-related expenses qualify.  

Tax Strategies for Homeowners

While most homeowners can’t deduct insurance premiums, there are other ways to optimize your tax situation, especially if you understand how deductions, records, and property use work together. 

1. Itemized vs Standard Deduction

Since the Tax Cuts and Jobs Act (TCJA) increased the standard deduction, most people no longer itemize. That’s important because deductions for things like casualty losses or home office expenses often require you to itemize.

Here are the standard deduction amounts for the 2025 tax year, according to Fidelity:

• $15,750 for single filers
• $31,500 for married couples filing jointly
• $23,625 for heads of household

If you’re 65 or older or blind, you may qualify for an additional deduction—typically around $2,000 if you’re single/head of household, or $1,600 per spouse if you’re filing jointly.

Bottom line: If your itemized deductions don’t exceed these amounts, you’re better off taking the standard deduction, and you won’t be able to claim any insurance-related tax breaks that require itemization. 

That makes it even more important to know which expenses qualify and under what conditions. 

2. Keep Clean Records If You Own Rental Property

If you’re deducting insurance for a rental or business property, the IRS expects detailed documentation:

• Policy statements showing premium amounts
• Proof of payment
• Clear records of proration if the property is mixed-use
• Copies of Schedule E or C forms used to report rental or business income

Good bookkeeping makes a major difference. If you’re ever audited, these records will support your deductions. 

3. Use the Simplified Home Office Method When Applicable

If you qualify for a home office deduction but hate complicated math, the IRS offers a simplified method:

• $5 per square foot, up to 300 sq ft (max $1,500)
• No need to calculate percentages for insurance, utilities, etc.

While you won’t get to deduct insurance separately using this method, it may be easier and reduce audit risk. The IRS Topic 509 explains both methods so you can choose what works best. 

4. Know the Limits on Casualty Losses

As covered earlier, you can only deduct unreimbursed disaster losses if the event was federally declared. Even then, you need to clear:

• A $100 floor per event
• 10% of your adjusted gross income (AGI)

If your income is high, this threshold becomes harder to meet. Still, if your home suffered significant damage and insurance didn’t fully pay out, this deduction might be worth pursuing, especially with the help of a tax professional. 

5. Talk to a Pro if You’re in a Gray Zone

If you’re unsure whether your property qualifies as mixed-use or whether an assessment can be deducted, get help. A CPA or enrolled agent can make sure you stay compliant while maximizing deductions legally. 

Real-World Scenarios

Let’s walk through some realistic examples to see how these rules play out in actual situations. These aren’t hypotheticals; they reflect common questions people have each tax season.

Scenario A: Fully Rented Condo in an HOA

Emily owns a condo in Arizona that she rents out year-round. She pays monthly HOA dues, which include building insurance. She also holds a personal condo insurance policy for her tenant’s benefit.

Tax impact:
Emily can deduct both the master policy portion of the HOA fees and her personal insurance premium on Schedule E, since they directly relate to producing rental income.

Scenario B: Home Office for Freelance Writer

Carlos works from his guest room full-time as a freelance writer. His home office takes up 12% of his home’s square footage. He uses the regular method for his home office deduction. 

Tax impact:
He can deduct 12% of his homeowners insurance as a business expense. He also deducts a portion of utilities, mortgage interest, and repairs.

Had he used the simplified method, he’d claim $5 per square foot and skip itemizing the insurance separately.

Scenario C: Mixed-Use Duplex

Tonya lives in one half of a duplex and rents out the other. Her insurance covers the entire structure. She calculates that 50% of the home is rental space.

Tax impact:
She deducts 50% of her insurance premium on Schedule E as a rental expense. The rest is considered a personal cost and not deductible.

She also deducts 50% of her utilities, repairs, and depreciation. Accurate records are critical in case of an audit.

Scenario D: Hurricane Damage in a FEMA Disaster Zone

Michael’s home in Florida was hit by a hurricane declared a federal disaster. His insurance only covered part of the roof damage, leaving him with $20,000 in unreimbursed loss.

Tax impact:
He may be eligible to deduct the unreimbursed portion—minus $100 and 10% of his AGI—if he itemizes. He consults IRS Topic No. 515 and Publication 547 to verify his eligibility.

Scenario E: Special Assessment in a Rental Condo

Jordan owns a rental unit in a condo association that issued a $3,000 special assessment to repair storm damage. The repair was to the building’s roof and was not covered by insurance.

Tax impact:
Since the unit is used to generate rental income, and the assessment covers building repairs, he deducts the full $3,000 as a maintenance-related business expense.  

Common Mistakes to Avoid on Your Taxes

Even when homeowners understand the basics of what’s deductible and what’s not, common missteps can still derail their tax strategy. These errors often go unnoticed until an audit or until someone pays more than they should. 

Here’s what to avoid.

1. Assuming All Insurance Is Deductible

This is by far the most frequent misunderstanding. Just because you pay for homeowners insurance doesn’t mean it’s a tax write-off. For your primary residence, insurance premiums are personal expenses, not business-related.

The only exceptions are covered earlier—rental use, home office, or investment property. Without one of those, the premiums aren’t deductible. Thinking otherwise could raise a red flag if you attempt to deduct them.

2. Forgetting to Prorate Mixed-Use Properties

If you rent part of your property or run a business from home, deductions must be prorated carefully. The IRS expects the split to reflect either square footage or actual use.

Let’s say you rent out a basement apartment that makes up 30% of your home’s square footage. Only 30% of your homeowners insurance premium is deductible. Overstating this can result in penalties, even if unintentional.

Accurate documentation—floor plans, insurance breakdowns, rental agreements—is key to supporting this deduction.  

3. Using the Home Office Deduction Incorrectly

The home office deduction can be powerful, but it’s also one of the most misused. The IRS has strict rules: the space must be used exclusively and regularly for business. A corner of your kitchen or your couch doesn’t count.

Refer to IRS Topic No. 509 to verify eligibility before claiming this deduction. Even freelancers and remote workers don’t always qualify. 

4. Claiming Deductions Without Itemizing

If you’re trying to deduct disaster-related losses, you must itemize. That means giving up the standard deduction—and in 2025, it’s a high bar.

Unless your itemized deductions (mortgage interest, medical expenses, charitable donations, etc.) exceed $15,750 for singles or $31,500 for joint filers, you won’t be able to claim those disaster-related losses.  

5. Skipping Amended Returns When Laws Change

If Congress reinstates a deduction like PMI, or you discover you misclassified a rental expense, it’s worth reviewing past filings. You generally have three years from the original due date to file an amended return. 

Frequently Asked Questions (FAQs) 

1. Is homeowners insurance tax-deductible for my primary residence?
   No. If you live in the home and don’t rent it out or use it for business, the premiums are considered personal expenses and not deductible.
2. Can I deduct insurance on my rental property?
   Yes. If you own rental property, homeowners insurance is a deductible expense on Schedule E. This includes landlord coverage, liability, and even specialized add-ons like loss of rent coverage. Just make sure the property is rented or available for rent during the tax year, and that you’re reporting all income correctly.
3. What if I rent out a room in my home?
   You may deduct a portion of your insurance based on how much of the home is used for rental purposes. For example, if the rented room is 20% of your home, you can deduct 20% of the premium. You’ll also need to allocate shared costs like utilities and repairs. This proration should be clearly documented in case of an audit.
4. Is flood insurance tax-deductible?
   Not for personal residences. However, if you carry flood insurance on a rental or investment property, the premium is typically deductible as a business expense. Insurify explains how this works in more detail. 
5. Are HOA insurance fees deductible?
   If you live in an HOA community and your unit is a primary residence, HOA dues, including the insurance portion, are not deductible. But if it’s a rental, those same HOA fees may be deducted as a cost of doing business. This includes regular dues and special assessments, provided they relate to repair, maintenance, or insurance gaps. 
6. Can I deduct insurance if I use the simplified home office deduction?
   No. The simplified home office method is a flat-rate calculation that replaces itemized business expenses. So while it’s easier to claim, you don’t get to separately deduct things like insurance, utilities, or depreciation. 
7. Is mortgage insurance (PMI) deductible in 2025?
   As of now, no. The PMI deduction expired at the end of 2021 and has not been renewed. If Congress revives it, that could change. Stay updated by checking IRS Publication 936 for the latest.   

The Final Verdict: When Homeowners Insurance Is (and Isn’t) Deductible

Here’s the bottom line: most homeowners can’t deduct their insurance premiums. If your home is strictly a personal residence, the IRS treats that policy as a non-deductible expense, no matter how much it costs or how essential it feels.

But that doesn’t mean the door is fully closed.

If you’re renting out the property, using part of your home for a qualified home office, or recovering from a federally declared disaster, deductions may be on the table. The key is understanding the fine print, keeping clean records, and avoiding the common traps that trip up even seasoned homeowners.

HOA members face even more complexity, especially when dealing with master policies, special assessments, and mixed-use condos. One wrong assumption can mean missed savings or, worse, an audit.

Need help navigating all this? 

Our membership plans give you access to unlimited personal support from an experienced HOA attorney—so you’re never left guessing when the stakes are high.  Get clarity, stay compliant, and protect your financial future. You don’t have to figure it out alone; become a member today!