Looking ahead to the remainder of 2025, the trends that have shaped the insurance market will
continue to challenge homeowners and carriers alike. As an insurance customer navigating the
market, it is increasingly important to have a solid understanding of the ever-evolving insurance
landscape, and proactive, detailed approaches are crucial.
Here are some strategies from our market analysis, Consumer Insights: Home Insurance Trends for 2025, to help customers avoid high premiums and at the same time get great coverage:
1. Engage with Trusted Agents
Customers need to stay in touch with their insurance agents to stay updated on changes that could affect their policies. Agents can help identify gaps in coverage, explain new risks, and offer advice on options or discounts that might fit their situation. This ongoing communication ensures customers are prepared and adequately protected as circumstances and insurance requirements change.
2. Review and Update Insurance Policies Regularly
Customers should review their insurance policies at least once a year to ensure adequate coverage. This includes assessing and updating coverage limits and deductibles to reflect any home improvements, renovations, or changes in property value, reducing the risk of being underinsured.
3. Consider Higher Deductibles
By raising deductibles, customers accept more out-of-pocket expenses after a claim, which usually leads to a lower premium. This method is significantly safer than letting coverage lapse or lowering coverage limits.
Customers may also want to explore deductible buy-down options with separate carriers, which are now available in the market. These programs provide additional insurance coverage through a separate policy or endorsement, reducing the deductible a policyholder must pay when filing a claim. It is important for customers to carefully consider these options, understand the trade-offs, and ensure they align with their financial situation and ability to cover potential out-of-pocket expenses.
4. Understand Flood Insurance Needs
Standard homeowner’s policies do not cover flood-related damage, leaving property owners vulnerable to significant repair and replacement costs. Flooding can result from various sources, including heavy rainfall, storm surges, overflowing rivers, and rapid snowmelt, and these risks are not limited to officially designated flood zones. FEMA reports that approximately 25% of flood claims come from properties outside high-risk flood areas.
This additional coverage is especially vital as weather patterns shift and urban development alters existing drainage systems, increasing flood risks in previously unaffected areas. Policies should be evaluated based on both current risks and potential future developments.
5. Consider Adding Coverage for Water Damage
Water damage is one of the most common causes of homeowners insurance claims, making it essential for customers to evaluate whether they have sufficient coverage. In addition to flood policies, homeowners should consider adding endorsements for increased protection against sewer backups and drain-related issues or raising coverage limits for water-related risks, particularly in areas prone to flooding or homes with aging plumbing systems. Including service line coverage is also recommended to protect against costly repairs to underground water, sewer, or utility lines.
Basic preventative measures can help reduce the risk of water damage year-round. Homeowners should consider installing sump pumps to manage water buildup, using smart water detection systems to catch leaks early, and insulating pipes to prevent freezing in colder months.
6. Stay Informed About Coverage Changes
Homeowners should stay informed about changes to insurance coverage, particularly for key home components like roofing, siding, and foundations. Policies may introduce stricter conditions, higher deductibles, or exclusions for older features. Regular policy reviews and proactively upgrading aging components can help maintain adequate protection.
By staying updated, homeowners can address these changes by replacing outdated components or adding endorsements to their policies, ensuring they have adequate coverage and avoiding unexpected expenses.
7. Plan for Natural Disasters
Customers in areas prone to natural disasters like hurricanes, wildfires, high winds, or hailstorms can protect their homes by investing in strategic improvements. For example, installing impact-resistant roofing and siding, reinforced garage doors, and adding protective systems like hurricane glass and shutters can reduce vulnerability to storms. For regions at risk of wildfires, creating defensible space by clearing flammable vegetation, using fire-resistant building materials, and sealing gaps around roofs or vents can help protect homes. Installing hail-resistant shingles, anchoring outdoor structures, trimming weak or overhanging tree branches, and securing outdoor property reduces the risk of damage from hail, high winds, or heavy rains during storm seasons.
Homeowners should also review their policy to fully understand coverage for specific hazards like hurricanes, tornadoes or hail. Since policy limits and exclusions can vary widely by location and insurance carrier, it is essential for customers to stay informed about their policy details.
8. Explore New Carrier Options
The evolving insurance market regularly introduces new carriers and competitive options. By comparing quotes from multiple providers, customers can evaluate premiums, deductibles, and coverage levels. Some carriers may offer unique discounts for bundling policies, maintaining claim-free histories, or having specific home upgrades like security systems or weather-resistant materials. Regularly exploring these options can help ensure customers get the best possible value for their coverage.
9. Understand the Implications of Non-Renewal
Non-renewal notices can happen due to factors like increased risk, geographic hazards, or property-related issues such as an aging roof or poor maintenance. Insurance carriers may also issue non-renewals due to changes in underwriting guidelines and service area limitations. Understanding these factors and taking proactive steps to prevent risks can reduce the likelihood of a policy non-renewal. If a non-renewal does occur, shopping for new coverage promptly is critical to avoid gaps in protection.
10. Prepare for Increased Premiums
With the insurance market facing ongoing challenges, premiums are likely to continue increasing in the coming years. Customers should incorporate premium increases into their annual budgets to avoid financial strain and explore cost-reduction methods.
Additionally, homeowners should work closely with their agent or provider to identify the factors driving premium increases and uncover potential savings. By taking a proactive approach, customers can better manage rising costs while ensuring they maintain the coverage they need.
Download the full report here. Our analysis highlights industry-wide trends such as rising policyholder out-of-pocket costs, changes to deductible structures, and evolving risks driving coverage distribution shifts. These factors underscore homeownersā growing challenges in securing adequate protection while managing higher expenses.
Leveraging Rate Insuranceās proprietary data and projections through 2025, customers can utilize actionable, strategic recommendations to adapt to this ever-changing insurance market.