What to expect in 2025: Providing customer insurance in a volatile real estate market

For 2025, there will be a transformation. Rising individual home rates, spurred by rising claim costs, rising property values ​​and the increasing frequency of natural disasters, will have a profound impact on market dynamics and homeowner insurance costs. For real estate professionals and lenders, these changes present both challenges and opportunities.

Rising insurance rates and their ripple effect

Individual insurance rates are expected to increase significantly next year. According to HUB's 2025 personal insurance market forecast released by VIU, homeowners insurance premiums could rise by as much as 15%, especially in high-risk areas that are vulnerable to extreme weather. In the first half of 2024 alone, insurance losses were 70% higher than the 10-year average. Coverage for catastrophic perils such as wind and flood insurance could see a percentage increase of more than 20% as a result of updated FEMA flood maps and more frequent natural disasters.

These rising costs directly affect homeowners' ability to afford affordable coverage and their financial readiness to buy a home, and home prices are also projected to increase by 0.0%. In disaster-prone regions, insurers are withdrawing from markets and policy non-renewals are increasing, leaving consumers with fewer choices. report that extreme weather has affected their insurance coverage, including that insurance underwriters have increased premiums for comparable premiums, and that 1 in 10 are “not confident” they will be able to renew their policies.

For real estate professionals and mortgages, these issues increase the risk of a deal being canceled and complicate the closing process. A clear understanding of the key factors driving these changes and addressing insurance costs early in operations is essential to avoid last-minute disruptions.

Forward-thinking companies can overcome challenges by integrating access to comprehensive insurance procurement solutions into their customer platforms. These vital partnerships simplify the process of buying personal insurance and create a bond between real estate professionals, mortgage brokers and their clients.

Creating a frictionless 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. With rising housing costs, potential buyers are increasingly sensitive to overall costs, making affordability a major concern.

Real estate and mortgage professionals can play an important role by helping clients find policies that fit their budgets and specific circumstances, reducing financial stress and easing the path to home ownership, especially in high-risk areas.

In areas affected by severe weather, guidelines are provided risk mitigation strategies is important. Helping homeowners secure adequate coverage and beyond strengthens local housing markets and fosters stronger relationships between real estate professionals and their homeowner communities.

Adaptation to development consumer needs important because today's homebuyers and borrowers demand convenience, transparency and expertise. Equipped with virtual property tours and commercial investment property analytics, real estate professionals empower their clients to explore options and make quick informed decisions, giving firms and lenders a competitive edge.

Employment simplified and digital processes Creating a frictionless journey from home search to purchase, including making it easy to access options for securing insurance, can help homeowners feel supported and confident throughout their transaction.

In addition, providing personalized, unbiased insurance advice elevates the customer experience, transforms the insurance buying process from a transactional necessity into a meaningful component of the home buying journey, and builds lasting brand loyalty.

Sustainable real estate practices for 2025

The challenges ahead require advanced solutions. Real estate and mortgage professionals can protect operations and build lasting community relationships by using tools, providing access to tailored coverage options and offering mitigation advice. Education and proactive strategies are key to ensuring sustainable and successful real estate experiences in a rapidly evolving market.

Travis Hodges is the Managing Director of VIU by HUB.

This column does not necessarily reflect the opinion of HousingWire's editorial department or its owners.

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