While homeownership has always come with its challenges, real estate agents are now facing even greater obstacles as skyrocketing homeowners insurance costs make closing deals more difficult.
Nearly 47% of agents surveyed reported experiencing more problems with home insurance during transactions over the past year compared to the previous one, based on Redfin Corp.’s 2025 Industry Survey.
Some Regions Have a Tougher Insurance Market
California and Florida are really feeling the impact. In California, about half of the agents surveyed said they’ve had a lot more trouble with homeowners insurance, and another 25% said things have gotten a bit worse compared to last year. Down in Florida, where hurricanes are common, 41.5% of agents said that insurance issues have gotten a lot worse, and 31.4% said they’re seeing a bit more trouble than before.
Insurers have suffered hundreds of billions of dollars in losses in California due to wildfires at the beginning of the year, while Florida has seen comparable claims from recent storm damage.
To help homeowners affected by the Los Angeles wildfires, California enacted a one-year ban this year preventing insurers from canceling or refusing to renew policies, after many homeowners were dropped in the months prior to the disaster.
Florida also experienced a wave of insurers leaving the state last year after a series of hurricanes and a recent study found that up to 20% of Florida homeowners may now be uninsured. The rising frequency and intensity of hurricanes has caused homeowners insurance premiums in Florida to soar to nearly five times the national average, mainly due to the increased risk of climate-related disasters, according to Devonta Davis of the Tampa Bay Business Journal.
This problem isn’t just happening in Florida. Across the country, a survey by ValuePenguin, an insurance company owned by LendingTree, found that two-thirds of homeowners saw their insurance premiums go up in 2024. Even more concerning, 25% of homeowners said their insurance company dropped them, which is up from 19% last year.
Other states are also raising red flags, with worries about rising insurance costs and nonrenewals growing in Maine, Colorado, and Arizona.
Homeowners in Texas—especially around Dallas—are facing their own set of challenges. With all the hailstorms and tornadoes lately, insurance claims have shot up, which means many insurers are hiking up premiums or becoming much pickier about whom they’ll cover.
Local real estate agents say more deals are falling through because buyers can’t find affordable coverage, and a few insurers have even pulled out of the Texas market. That’s left a lot of Dallas homeowners worried about rising costs and the possibility of losing their insurance, just like what’s happening in other high-risk states.
A lot of homeowners are making some tough choices to get by: 34% say they’ve cut their home insurance coverage to save money, and 31% have even thought about dropping it altogether. On top of that, half of homeowners are now worried their homes might not be insurable in the future, and 75% think rates will keep going up in 2025.
Industry Consolidation Means Disasters Have a Broader Insurance Impact
Years of consolidation in the reinsurance sector—basically insurance for insurance companies—have left just a few providers covering the entire country. When these companies take big losses from catastrophic disasters, it affects how they price coverage across all their policies the following year.
A 2024 working paper from the University of Pennsylvania and the University of Wisconsin School of Business found that average premiums had already jumped about 33% from 2020 to 2023—or 13% after inflation—according to Medici’s earlier reporting.
The pandemic has really turned the real estate market upside down, with 63% of lenders saying it’s gotten tougher to get home insurance. Buyers are now paying a lot more attention to climate risks, especially with all the extreme weather and flooding lately.
Home prices have shot up too, with the median price jumping 35% from $327,100 in 2019 to $442,600 in 2022. Insurance companies have raised rates, stopped taking on new customers in risky areas, and even dropped some existing ones, making home insurance tougher to get and a lot more expensive. All of this has caused home prices to level off in 2024.
