That’s the conversation I’ve started having with buyers lately—and for good reason. Homeowners insurance, once an afterthought, is now a deciding factor in real estate deals, especially in weather-prone or high-demand areas. I’ve seen too many transactions stall at the last minute because buyers weren’t prepared for steep premium surprises. As affordability continues to squeeze every corner of the market, ignoring this growing cost isn’t just risky—it’s short-sighted.

Rising Homeowners Insurance Costs: What Buyers Need to Know

In a recent panel at the National Association of Realtors’ legislative meetings (May 2025), experts rang the alarm on the escalating role of insurance in the homebuying process. Fueled by inflation, extreme weather, and rising home prices, premiums have spiked beyond the rate of inflation between 2018 and 2022 (U.S. Treasury Report).

In areas prone to hurricanes, wildfires, or floods, insurance can now add hundreds of dollars to a monthly payment—an expense that many buyers don’t factor in until it’s too late.

4 Insights Every Real Estate Pro (and Buyer) Needs to Hear

1. Insurance Is Now Part of Affordability—Not an Extra

We talk about principal, interest, taxes… but insurance? It’s finally demanding a seat at the budgeting table. For example, in coastal states, I’ve seen premiums as high as $6,000–$8,000 per year. That’s like tacking on another $500–$650/month to your mortgage rate. Ignoring this reality in 2025 is a setup for sticker shock.

2. The Roof Isn’t Just a Feature—It’s a Financial Risk

With 80% of claims tied to roofs, this isn’t just a maintenance issue—it’s a risk management strategy. Older asphalt shingles, especially after 10 years, become vulnerable. Think of them like car tires: they’re fine… until they’re not. Roof age and material should be as important to your buyer as square footage or school districts.

3. Fewer Carriers Means Less Wiggle Room

Insurers are pulling out of high-risk areas. That means fewer choices and higher costs. In some states, buyers may find only one or two viable options—and that limited competition is rarely friendly to consumers.

4. Resilience Upgrades = Potential Discounts

Fortified roofs, better windows, and fire-resistant materials aren’t just smart—they’re negotiation tools. Sellers who invest in these may attract more serious buyers. And buyers who ask about them can often secure policy discounts.

Guidance for Buyers, Agents, and Sellers

For Buyers:

• Start your insurance conversation before you make an offer. Get pre-quotes on listings you’re serious about.
• Ask your agent for the age and material of the roof. Don’t just “eyeball it.”
• Request a CLUE (Comprehensive Loss Underwriting Exchange) report to understand the home’s past claims history.

For Agents:

• Partner with a local insurance pro. Have them available to run quotes or educate your buyers in real-time.
• Don’t hesitate to factor insurance into total monthly cost estimates when advising clients—especially first-time buyers.

For Sellers:

• If your roof is nearing 10+ years old, consider replacing it or offering a seller credit.
• Highlight any resilience improvements in your listing to attract more informed and cost-conscious buyers.

What Is a CLUE Report, and Why Should I Ask for It?

A CLUE report (Comprehensive Loss Underwriting Exchange) shows a property’s insurance claim history. It can reveal past issues like roof damage, flooding, or fire—even if the seller didn’t disclose them. It’s a smart tool for spotting red flags early and gauging potential premium costs.

Tech Tip: Use Smart Tools to Price Realistically

Platforms like insurance cost estimators or homeownership budget calculators can help you or your client see the full picture before making emotional decisions. In today’s market, clarity beats speed.

Common Buyer Questions—Answered

Can I shop around for homeowners insurance like I do for a mortgage?

Yes, and you should. Rates and coverage can vary widely by provider and home type.

Does a newer roof always lower my premium?

Not always, but it often helps. A certified “fortified roof” might bring meaningful discounts, especially in storm-prone states.

Can I back out of a deal if insurance is too expensive?

That depends on your contract contingencies. It’s best to explore costs early so you’re not forced to make a tough call under pressure.

Final Thought:

Real estate is about more than price per square foot—it’s about peace of mind. And in 2025, that peace often hinges on whether you factored in homeowners insurance early enough. Let’s start treating it like the critical puzzle piece it’s become.