As homeowners premiums continue to rise, agents should discuss the cost realities with their clients early, a Howard Hanna Insurance Services exec advised.
Rising costs in the housing market
Raised mortgage rates and high home prices get the bulk of the attention in discussions about the housing affordability crisis. But skyrocketing insurance premiums are also driving up housing costs.
“Insurance pricing has been really a hard market for the past couple of years” due to natural disasters and the nation’s aging housing supply, Howard Hanna Insurance Services President and COO Annie Hanna Engel said during a recent episode of Howard Hanna’s The Closing Table podcast. Joining the discussion was Marianne Hall, an agent with the brokerage, who said she used to be able to make an educated guess about a homebuyer’s likely premium — but not anymore. Now there is “so much more that goes into it,” she said.
Engel noted that carriers are struggling to balance risk and reward in a volatile environment.
Timing the conversation
Start the insurance conversation early. Before a buyer is well into the transaction, an insurance advisor should be involved to talk about a property’s potential risks, Hanna Engel said.
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“We want to work in really tight communication with the real estate agent early on so that the buyers know what they’re getting into,” she said. “The earlier we can have that conversation and start looking at the property for them and with them, the better.”
Hall said she introduces her insurance contact to her clients twice — once while mapping out the transaction’s proposed timeline and again when the home sale agreement is fully executed.
Providing details to offset costs
Every agent should have a working relationship with an insurance provider, according to Hall. In addition to meeting them in person, understanding “how they like to communicate and work,” including whether they prefer to text or email, is important. That knowledge will make an agent “confident when [they] pass along their phone number on how they’re going to communicate with your buyers — and how quickly.”
“I tell all of my buyers: If you do a new furnace, new air conditioner, new hot water tank, any type of mechanicals, you’re replacing windows, even some of your appliances — there’s no such thing as too much information,” Hall said. “Let your insurance coverer know. Otherwise, how are you ever going to get discounts?”
Insurance providers are “assuming the worst,” she explained, but “new doesn’t have as much risk.” Policy holders “have to be able to provide information to offset” rising rates.
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This advice creates a unique financial reality for modern homeowners. In a market where home equity is often the primary retirement vehicle for American families, the cost of preservation becomes a critical factor. When insurance premiums absorb a larger percentage of monthly housing expenses, the distinction between a safe investment and a heavy liability blurs. Policyholders are effectively forced to treat their homes as active financial projects, constantly upgrading systems to maintain affordability. The effort to secure lower rates is essentially an effort to protect the home’s long-term standing as a store of wealth.
“You’re going to save money on your insurance as well as just gaining equity in the home,” Hall added.
The reach of disaster risk
Environmental factors play a role in premium hikes, but a natural disaster doesn’t just affect the communities it impacts directly. “Even when it doesn’t occur in your market, down the line — a year or 18 months down the line — that insurance carrier does have to keep their coffers full,” Hanna Engel said.
A storm in North Carolina, for example, will eventually affect insurance costs in Pennsylvania. “That really is driving it,” Hanna Engel said. “Even though there’s not a lot of clarity in the insurance industry to tell us that, it absolutely is.”
Future outlook
Hanna is “pretty confident” that premiums “will ease up a little bit” in 2027.