What’s really going on with home insurance?

It’s a hard market and, by some accounts, getting harder. Rates are up, insurance capacity is limited—if not closed—and concern mounts among home builders, home buyers, and lenders.

A closing requirement that was once easily available now presents challenges: Insurers lost money on home insurance in more than a third of the country in 2023, compared to just five states in 2013.

What’s a home builder to do?

It’s a question that few are better prepared to answer than Alan Umaly, president of Westwood Insurance Agency, an independent agency that works with 15 of the nation’s top 20 home builders.

“Builders feel threatened,” Umaly explains. “They’re wondering if closings are at risk. What if home insurance carriers have no additional capacity? Who will write insurance for my home buyers? Home builders frequently see home insurance challenges differently than insurance industry professionals do.”

Umaly cites at least three home insurance factors home builders may find encouraging as they plan for growth in 2025 and beyond:

  • Builder Collaboration. Builders have many issues to juggle when developing new communities. Concerns about the availability of home insurance for buyers shouldn’t be one of them. That’s why it’s never been more important for builders to inform their decision-making with fact-based straight talk on insurance market conditions. “Builders need an insider’s view on insurance rates and availability,” Umaly advises. “They need market insight that goes beyond the headlines so they can plan with confidence.” Part of that planning strategy is seeking expert guidance from others, such as civil and environmental engineers, as well as insurance advisors, on the best locations to build and construction methods to use. “I’ve been with Westwood for 32 years,” says Umaly. “This is the first time partners have been asking how location and construction methods impact home insurance rates and availability. There’s more risk awareness. That’s a good thing.”
  • State Regulation. Umaly believes state insurance regulators are forming a deeper appreciation of the struggles many carriers now face. “State insurance commissions are working even more closely with carriers,” the industry veteran reveals. “In California for example, regulators are asking what carriers need so they can do more to help.”
  • Industry Resilience. It’s easy to list the hardships builders and insurance carriers have faced over the last 30 years, from earthquakes and hurricanes to a pandemic and recessions. Yet through it all, builders and insurers have succeeded. “My optimism comes from the fact that our industries have gone through so much together. Builders are quick to figure things out,” he says.

Changing insurance conditions require constant vigilance. Umaly says the team at Westwood Insurance Agency is uniquely qualified to provide the insurance insight builders need. “Home insurance is a complex, highly regulated industry. We work with dozens of home insurance carriers in all 50 states to offer home buyers the insurance coverage they need to complete their new-home purchase. This may be a good time to consider how a trusted home insurance advisor can benefit your business.”

Learn more about how an inside view of home insurance can benefit your business.