The year 2025 will have a revolution in housing. Rising personal home insurance rates, fueled by rising claim costs, rising property values and increasing frequency of natural disasters, will all have a major impact on market volatility – and homeowner insurance costs. For real estate professionals and mortgage lenders, these changes bring both challenges and opportunities.
Rising insurance rates and their dramatic consequences
Personal insurance rates are expected to increase significantly next year. Homeowners insurance premiums could increase as much as 15%, especially in areas at high risk of extreme weather, according to a 2025 home insurance market outlook released by VIU by HUB. In the first half of 2024 alone, insured losses reached $62 billion, 70% above the 10-year average. Peril coverage, such as wind and flood insurance, may see rate increases in excess of 20%, driven by updated FEMA flood maps and more frequent natural disasters.
These rising costs directly affect homeowners’ ability to secure affordable coverage and their financial readiness to purchase a home, with home prices also expected to rise 4.4% by 2025. In disaster-prone regions, insurers withdraw from the market and policy non-renewals occur. increase, leaving consumers with fewer options. Two-thirds of consumers report that severe weather has affected their insurance coverage, including that underwriters have raised premiums to match coverage, and one in ten are “not confident” they will be able to afford to renew their policies.
For real estate professionals and mortgage lenders, these challenges increase the risk of contract cancellations and complicate the closing process. Having a clear understanding of the fundamentals driving these shifts and addressing insurance costs early in the process 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. This important partnership simplifies the process of buying personal insurance and creates a bond between real estate professionals and real estate agents and their clients.
Creating 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 adapt. As housing costs rise, potential homebuyers are increasingly sensitive to overall costs, making affordability a major concern.
Real estate professionals can play an important role by helping to find policies that fit their clients’ budgets and specific circumstances, reducing financial stress and easing the path to home ownership, especially in high-risk areas.
In regions affected by bad weather, giving guidance about risk reduction strategies it is important. Assisting homeowners in obtaining adequate and additional coverage strengthens local housing markets and fosters strong relationships between housing professionals and their homeowner communities.
Adaptation and development consumer needs important, as today’s consumers and borrowers seek convenience, transparency and technology. Real estate professionals equipped with technologically advanced solutions such as virtual property tours and commercial investment property analysis empower their clients to explore options and make informed decisions quickly, giving firms and lenders a competitive edge.
Employment has improved as well digital processes to create a hassle-free journey from home search to purchase – including making it easy to access insurance options – can help homeowners feel supported and confident in everything they do.
In addition, providing personal, unbiased insurance advice elevates the customer experience, transforms the insurance buying process from a chore into a meaningful part of the home buying journey and fosters lasting brand loyalty.
Real estate trends for 2025
Future challenges require forward-thinking solutions. By leveraging technology tools, providing access to complementary integration options and offering mitigation advice, real estate professionals can secure transactions and build lasting community relationships. In a rapidly evolving market, education and effective strategies are critical to ensuring strong and successful real estate practices.
Travis Hodges is the Managing Director at VIU through the HUB.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the editor responsible for this piece: [email protected].
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