Key Details:
- Realtor.com® reports that 75% of buyers fear homeowners insurance will become unaffordable, while 42% have already seen costs rise in the past two years.
- Nearly half face challenges obtaining or renewing coverage, and 33.7% have changed their home search geography due to insurance issues.
- 58% said they may forgo insurance completely if it becomes too expensive.
It’s not just rates or home prices that buyers are losing sleep over.
According to a new Realtor.com® survey, 75% of recent and prospective homebuyers believe homeowners insurance could ultimately become unaffordable.
That fear isn’t unfounded. More than one in four U.S. homes, representing $12.7 trillion in value, face severe or extreme climate risks.
And those risks come with higher insurance costs.
The Rising Cost of Coverage
The survey found that 42% of buyers have already seen their premiums rise over the past two years. Another 88% expect costs to continue climbing.
Nearly half have faced, or expect to face, challenges obtaining or renewing homeowners insurance in the near future.
Here’s how respondents broke it down:
- 42.1% reported their premiums definitely rose in the past two years, while 31.3% said “probably.”
- 45.2% expect to definitely pay more in the future, and 43.3% think it’s probable.
- 20.7% said they have already faced challenges obtaining insurance, while another 27.9% said it “probably” applied to them.
- 20.1% faced challenges renewing policies, and 27.5% said they probably did.
Will Buyers Forgo Insurance?
While most homeowners are legally required to maintain insurance if they carry a mortgage, many buyers say they would consider skipping coverage altogether if costs keep climbing.
- 58% said they would or probably would forgo coverage if it became too expensive.
- Among Gen Z buyers, that number jumps to 76%, even though most still need insurance to secure a loan.
Danielle Hale, Chief Economist at Realtor.com®, explained the dilemma buyers face.
“Homeowners insurance offers financial protection for consumers that may help cover damage to homes and personal property from an extreme weather event or fire, while also providing personal property and liability coverage.
“But these benefits come with an upfront cost that has risen as weather events have become more frequent and impactful and rebuilding costs climb.
“Homeowners are looking for strategies to lower costs including adjusting their home searches and potentially short-charging or forgoing coverage altogether.”
Shifting Search Strategies
Insurance costs and access are already reshaping how buyers look for homes.
One-third of home searchers (33.7%) completely changed the geographic area where they were looking. Another 30% expanded their search beyond their original target.
Nearly one in four shifted their overall buying strategy.
Generational differences tell a story, too:
- 30.5% of Gen Z buyers completely changed their strategy, compared to just 5.9% of Boomers.
- Around one-third of Gen Z, Gen Y, and Gen X expanded their search geography, but only 15.8% of Boomers did the same.
- At the other end, 32.9% of Boomers said insurance challenges haven’t changed their plans at all, compared to about 15–16% for younger buyers.
Climate Risk and Regional Costs
Climate risk is driving much of the pressure. Severe risks from flooding, wildfire, and hurricane winds are pushing premiums higher in vulnerable regions.
According to Realtor.com®, for single-family homeowners under a standard HO-3 policy, the typical homeowner in Miami now pays annual premiums equal to 3.7% of the home’s market value, the highest ratio among the nation’s 100 largest metros.
For agents, this data is more than a conversation starter. Insurance costs are now a deciding factor in where and how buyers search for homes.
Bringing these concerns into early conversations with clients shows awareness of the financial challenges they face. Positioning yourself as a resource on local insurance trends can help buyers plan ahead, avoid surprises, and make more confident decisions.
