Homeowners Insurance
By Jim Palmer Jr.

One of the burdens that buyers are facing in the coming year is the rising cost of homeownership, including the added cost of rising homeowners insurance. Insurers are withdrawing from high-risk areas, such as timbered lands and regions where timberland and range fires are prevalent.

Wildfires, floods and hurricanes are becoming more frequent and severe across the county which is usually blamed on global warming, and whether you believe that is caused by humans or is a natural occurrence it doesn’t really matter. Rising costs become an issue when rebuilding efforts encounter inflation and supply chain issues that drive up repair and construction expenses. Some insurers are exiting high-risk states altogether, reducing options for consumers.

Rising insurance premiums then affect the buyer’s total housing expense. Add those rising costs onto already elevated listing prices and taxes and it becomes a hurdle too high for many buyers. Closings can be delayed or even have to be abandoned when buyers have difficulty securing insurance binders. That dynamic makes it difficult for buyers to find affordable homes and for sellers to sell in areas that are most affected by the “high risk” mapping that is occurring in some states.

So what can buyers do to counteract those difficulties? Start shopping for insurance early in your transaction. Don’t wait until the last minute or you may be found wanting. Partner with trusted insurance agents who understand market challenges in your area. Buyers can work with good agents to explore different carriers and coverage options well ahead of time.

Sellers can make home and property improvements that reduce insurance costs, like using fire resistant construction types (metal roofing and hardboard siding) and creating defensible spaces around the home and buildings, skirting around decks or adding fire proof landscape covers like decorative rock or gravel instead of flammable ground cover plants or bark covered areas. Mowing or eliminating tall grass or weeds around structures well ahead of the usual fire season can make all the difference. Keep it green!

Insurance difficulties are a new dynamic for real estate brokers and consumers, but in our free market system, I’m convinced that people will adjust quickly to this new challenge and I’m sure that insurance companies will create new policies and procedures that will bring innovative products to the market to overcome and mitigate these new age risks.