Insuring customer insurance in a volatile real estate market

The year 2025 will be a transformative year for real estate. Rising private home insurance rates, fueled by rising claims costs, rising property values ​​and the increasing frequency of natural disasters, will all have a profound impact on market dynamics – and on homeowners’ insurance costs. For real estate professionals and mortgage lenders, these shifts present both challenges and opportunities.

Rising insurance rates and their ripple effects

Private insurance rates are expected to rise significantly in the coming year. Homeowners insurance premiums could rise by as much as 15%, especially in high-risk areas vulnerable to extreme weather events, according to a 2025 personal insurance market outlook released by VIU by HUB. Insured losses increased in the first half of 2024 alone $62 billion70% above the ten-year average. Catastrophic risk coverage, such as wind and flood insurance, could carry interest rate increases of more than 20%, driven by updated FEMA flood maps and more frequent natural disasters.

These rising costs directly impact homeowners’ ability to secure affordable coverage and their financial willingness to purchase homes, with home prices also expected to rise by 4.4% in 2025. In disaster-prone regions, insurers are withdrawing from the market and policy non-renewals are increasing, leaving consumers with fewer options. No fewer than two-thirds of consumers report that extreme weather has affected their insurance coverage, including insurers increasing premiums for similar coverage, and 1 in 10 are “not confident” they can afford to renew their policy.

For real estate professionals and mortgage lenders, these challenges increase the risk of deal cancellations and complicate the closing process. Having a clear understanding of the underlying factors driving these shifts and addressing insurance costs early is essential to avoid last-minute disruptions.

Forward-thinking companies can overcome challenges by integrating access to comprehensive insurance purchasing solutions into their customer platforms. These essential partnerships simplify the personal insurance purchasing process and create tension between real estate professionals and mortgage brokers and their clients.

Create a hassle-free journey from home search to purchase

As rising insurance rates and natural disasters reshape the housing market, real estate professionals and mortgage lenders must proactively adapt. As housing costs rise, potential buyers are becoming increasingly sensitive to overall costs, making affordability a top priority.

Real estate and mortgage professionals can play a critical role in helping find policies that fit their clients’ budgets and specific circumstances, reducing financial stress and easing the path to homeownership, especially in high-risk areas.

In regions affected by severe weather, provide advice on risk mitigation strategies is essential. Helping homeowners secure adequate coverage and beyond strengthens local housing markets and fosters stronger bonds between real estate professionals and their homeowner communities.

Adapt to evolve consumer needs is essential as today’s homebuyers and borrowers demand convenience, transparency and expertise. Real estate professionals equipped with technologically progressive solutions such as virtual property tours and commercial real estate analytics enable their clients to explore options and make informed decisions quickly, giving businesses and lenders a competitive advantage.

Using streamlined and digital processes By creating a hassle-free path from searching for a home to purchasing it – including making it easy to access insurance options – homeowners can feel supported and confident during their transaction.

Additionally, providing personalized, unbiased insurance advice improves the customer experience, transforming the insurance purchasing process from a transactional necessity to a meaningful part of the buying journey and promoting lasting brand loyalty.

Resilient real estate practices for 2025

The challenges ahead require progressive solutions. By leveraging technical tools, providing access to customized coverage options and offering risk mitigation advice, real estate and mortgage professionals can secure transactions and build lasting community relationships. In a rapidly evolving marketplace, education and proactive strategies are critical to ensuring resilient and successful real estate practices.

Travis Hodges is the General Manager of VIU by HUB.

This column does not necessarily reflect the opinion of HousingWire’s editorial staff and its owners.

To contact the editor responsible for this piece: [email protected].