The real estate landscape is shifting, causing challenges for real estate professionals in 2025. The impact of rising insurance rates on real estate includes home insurance rates climbing due to increasing claims costs, rising property values and the growing impact of natural disasters. Homebuyers and industry professionals are navigating a more complex market, and buyers are counting on professionals to help them through it, creating potential opportunities. By guiding buyers through the complexities of today’s market, real estate agents and mortgage brokers can position themselves as experts and reap the rewards.

The ripple effect of rising insurance costs

Home insurance premiums are expected to rise significantly in 2025 – by as much as 15% in some areas, with catastrophic peril coverage (like wind and flood insurance) spiking 20% or more. This, according to a VIU by HUB personal insurance marketplace outlook. Not only that, but insured losses hit $62 billion in just the first half of 2024 – 70% above the 10-year average. The premiums are driven up by those increased covered losses, but what is driving those? Extreme weather, updated FEMA flood maps, and insurance carriers pulling back from high-risk markets.

The impact of rising insurance rates on personal homeowners includes:

• Increased financial strain when purchasing or maintaining a home.
• Limited insurance options, especially in disaster-prone regions.
• A higher likelihood of deal delays or cancellations due to affordability concerns.

As many as two-thirds of consumers say extreme weather has affected their insurance, and 1 in 10 are uncertain whether they can afford to renew their policies. For real estate and mortgage professionals, understanding these dynamics – and their solutions – can keep transactions on track and build trust and long-term relationships with clients.