Homeowners nationwide are feeling the pressure as insurance premiums continue to climb. For real estate agents, staying informed about these rising costs is critical, not just to support buyers in making informed decisions, but to set realistic expectations during homebuying. So, what’s driving these increases, and how can agents empower their clients to make wise choices?

Understanding the Surge in Insurance Rates

Insurance premiums are reaching new highs, and it’s not without cause. Agents should be prepared to explain to clients that a combination of economic and environmental factors is driving these rate hikes:

• Natural Disasters: Hurricanes in the Southeast and wildfires out West have dramatically increased claims. With more frequent and severe catastrophes, insurers face greater risk, which is passed on to policyholders.
  
• Carrier Withdrawals: In high-risk regions, some insurers have pulled out altogether. This reduces competition and concentrates risk among fewer providers, leading to even higher premiums.
  
• Persistent Inflation: While inflation has cooled from its peak, the cost of building materials remains at a multi-decade high, affecting insurance replacement cost calculations.
  
• Labor Shortages: A shortage of skilled tradespeople has extended construction timelines and pushed wages upward, further increasing the cost to repair or rebuild a home after a loss.
  

What Can Clients Do?

Although these broader issues are out of any one person’s hands, agents can guide clients on practical steps to help mitigate rising costs. Here’s what real estate professionals can recommend:

• Compare Insurance Quotes Annually: Encourage homeowners to shop around each year. Comparing policies with identical deductibles and coverage levels may reveal better options.
  
• Raise the Deductible: Opting for a higher deductible can significantly reduce premium costs. Suggest clients set aside funds to cover the deductible in case they ever need to file a claim.
  
• Bundle Policies: Clients can often receive discounts by bundling their homeowners, auto, and umbrella policies through the same provider.
  
• Invest in Preventive Upgrades: For those in hurricane or wildfire zones, recommend installing hurricane straps, storm shutters, or clearing brush around the home. These improvements may lower premiums and improve safety.
  
• Maintain a Strong Credit Profile: Since many insurers use credit scores to assess risk, agents should remind clients that keeping debt low and paying bills on time can translate into insurance savings.
  

The Agent’s Role in a Shifting Market

Today’s buyers are often surprised by the added expense of homeowners’ insurance, especially when costs vary widely by region and property type. By staying ahead of trends and offering thoughtful guidance, agents can help clients make informed choices that protect their investment and support long-term affordability.

Rising insurance costs don’t have to be a dealbreaker. With the correct information and proactive strategies, homebuyers can take control of their coverage decisions. Real estate agents who bring this kind of insight deliver real value, building trust and strengthening relationships that last long after the closing table.

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At Fathom Realty, we believe it’s your business, and you should be able to choose your path. With Fathom, you harness the power of advanced technology, receive invaluable training, and enjoy dedicated local support. Our community embodies service, cultivates a strong culture, and pursues excellence in everything we do. It’s your business. You should be able to choose your plan. Whether you opt for Fathom Max or Fathom Share, you can access industry-leading commission plans designed to help you thrive in any market. Why settle for less when you can have more? Reach out today and discuss how Fathom can elevate your real estate career. Come Grow With Us!