Secrets to Surviving a Challenging Insurance Market

Secrets to Surviving a Challenging Insurance Market

Here are three key factors about home insurance that builders everywhere should keep in mind.

What’s Happening with Home Insurance?

The home insurance market is becoming increasingly difficult. Rates are rising, insurance availability is shrinking, and concerns are growing among home builders, buyers, and lenders. What used to be a straightforward requirement at closing is now a significant hurdle: Insurers lost money on home insurance in over one-third of the country in 2023, compared to just five states a decade ago.

How Should Builders Respond?

This is a pressing question, and few people are better equipped to address it than Alan Umaly, president of Westwood Insurance Agency, an independent agency that partners with 15 of the nation’s top 20 home builders.

“Builders are feeling the pressure,” says Umaly. “They’re worried about the impact on closings. What happens if insurance carriers run out of capacity? Who will provide coverage for my buyers? Builders often see insurance challenges differently than those within the insurance industry.”

Umaly points to three factors that could give builders some confidence as they plan for growth in 2025 and beyond:

Builder Collaboration: Builders face numerous challenges when developing new communities, and securing home insurance for buyers shouldn’t add to their burdens. This is why it’s crucial for builders to stay informed with accurate, fact-based insights on the current state of the insurance market. “Builders need an insider perspective on insurance rates and availability,” says Umaly. “They need market insights that go beyond headlines to plan effectively.” This planning should include seeking expert advice from professionals like civil and environmental engineers and insurance advisors to make informed decisions about location and construction methods. “In my 32 years at Westwood, this is the first time partners are asking how location and construction techniques impact insurance rates. There’s an increased awareness of risk, which is a positive shift.”

State Regulation: State regulators are becoming more aware of the challenges facing insurance carriers. “Insurance commissions are working more closely with carriers to find solutions,” Umaly explains. “In states like California, regulators are actively engaging with carriers to understand their needs and offer more support.”

Industry Resilience: Despite facing numerous challenges—from natural disasters to economic downturns—builders and insurance carriers have consistently adapted and thrived. “I’m optimistic because our industries have weathered so many storms together,” Umaly says. “Builders are resilient and quick to adapt.”

Navigating changing insurance conditions requires vigilance and expertise. According to Umaly, Westwood Insurance Agency is well-positioned to provide builders with the insights they need. “Home insurance is complex and highly regulated. We collaborate with dozens of carriers nationwide to help home buyers secure the coverage they need to complete their purchases.

Now might be the perfect time to consider how a trusted insurance advisor can enhance your business strategy.”