
Rising Insurance Costs & Extreme Weather: What Realtors Need to Know
Home insurance rates have been climbing for years, and after the latest wildfires in California, they’re expected to soar even higher. Analysts estimate that the insured losses from these wildfires could surpass $20 billion, making it the costliest fire in U.S. history.
But here’s the real problem: This isn’t just a California issue. Insurance rates are rising nationwide, and many homeowners may be underinsured without even realizing it.
As a real estate professional, you need to be prepared to answer your clients’ questions about increasing insurance costs, home affordability, and what steps buyers and sellers should take to protect themselves. Let’s break down what’s happening and what realtors need to know.

Why Are Insurance Rates Skyrocketing?
The increase in home insurance costs is driven by several factors:
✔ Extreme Weather Events Are More Frequent – In 2023 alone, the U.S. experienced 27 separate billion-dollar disasters, from wildfires to hurricanes. These disasters are leading to higher claims, forcing insurance companies to raise rates.
✔ Insurance Companies Are Adjusting Their Risk Models – Companies now account for future climate risks, not just past trends. Half of all U.S. homes are now considered at risk for extreme environmental damage.
✔ The Cost of Home Repairs Has Surged – Thanks to labor shortages, material price hikes, and supply chain disruptions, rebuilding a home today costs nearly double what it did just a few years ago. Many homeowners are renewing their policies without realizing that their coverage may no longer be enough to rebuild their home if disaster strikes.
How This Affects Homebuyers & Sellers
🔺 Homeownership Is Getting More Expensive
With premiums rising by 33% since 2020, many buyers are now factoring in insurance costs when determining affordability. Higher premiums mean higher monthly payments—something that can make or break a deal.
🔺 Homeowners May Be Underinsured
Most homeowners aren’t updating their coverage to reflect today’s rebuilding costs. If disaster strikes, they could be left with a massive financial gap. Realtors need to educate sellers on getting updated home valuations to ensure they have adequate coverage.
🔺 Buyers Are Asking More Questions About Insurance
Buyers today aren’t just asking about mortgage rates—they’re asking about insurance costs, flood zones, and climate risks. If you’re not prepared to answer these questions, you could lose their trust (and their business).

What Realtors Can Do to Help Clients
📌 Encourage Homeowners to Review Their Policies
Many people renew their policies without checking if they’re adequately covered. Encourage homeowners to ask their insurance provider:
✔ Is my coverage amount enough to rebuild my home at today’s costs?
✔ Do I need additional coverage for natural disasters like floods or wildfires?
✔ Are there any discounts I qualify for to offset rising costs?
📌 Educate Buyers on Insurance Costs Before They Make an Offer
Buyers often focus on mortgage payments but overlook rising insurance premiums. Make sure they understand:
✔ How location affects insurance rates.
✔ The difference between a standard policy and additional coverages (e.g., flood insurance).
✔ The importance of comparing insurance quotes before closing.
📌 Highlight Climate Risk in Listings
Buyers are becoming more aware of environmental risks, and they appreciate transparency. If a property is in a high-risk zone, make sure clients understand what that means for their insurance rates and long-term affordability.
📌 Partner with Local Insurance Experts
Having a trusted insurance professional in your network can help buyers and sellers navigate their options without surprises down the road.
Conclusion: Be the Realtor Who Guides, Not Just Sells
In 2025, insurance is no longer a side topic in real estate—it’s a core part of the home-buying and selling process. Buyers want to know how insurance will affect their bottom line, and sellers need to ensure their coverage is sufficient before listing.
If you’re not prepared to have these conversations, you risk losing clients to agents who are.
📢 Want to learn how to stay ahead of market trends like this?
Join my Solo Agent Accountability Coaching Program to gain expert insights, build confidence in your client conversations, and take your real estate business to the next level.
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