Rising Homeowners' Insurance Costs Are Breaking Home Deals

Rising premiums, budget constraints, and stricter policies are causing deals to fall apart, but I’ll share tips for you to protect your transaction before it’s too late.

A few months ago, we got a notice that our homeowner's insurance was being canceled. Not because of storm damage. Not because of a major repair issue. It was canceled because there were leaves in the gutters. That was the entire reason. Our home was clean, well-kept, and in good condition, but that didn't matter. An inspector showed up, took a quick look, and the policy was dropped. It was frustrating, unexpected, and eye-opening, and it's part of a growing trend that is affecting more homeowners, buyers, and sellers across the country.

Homebuyers are facing tighter budgets. Right now, the cost of buying a home is already high. Mortgage rates haven't dropped, prices continue to rise, and buyers are having to stretch to stay within budget. When insurance quotes come back higher than expected, it can push monthly payments beyond what the lender will approve. We've seen deals fall through because buyers couldn't get coverage that fit within their financial limits. In some cases, they couldn't get a policy at all. If you're planning to buy, you can't wait until closing week to think about insurance. It needs to be part of your upfront planning.

"When insurance issues aren’t addressed early, it can cause deals to fall apart."

Sellers may see lower offers or fewer qualified buyers. Higher insurance costs don't just affect buyers. They also change how homes are priced and negotiated. If buyers know it will cost significantly more to insure a property, they may offer less or walk away. For sellers, this can lead to delays, price reductions, or lost deals. That's why we advise sellers to get ahead of this step. By getting quotes early and sharing them with buyers, we remove guesswork and help keep the sale on track. This is especially important for homes in high-risk areas, such as flood zones or regions with frequent weather events. Insurance availability in these areas is shrinking, and costs are rising fast.

It's about timing, preparation, and protecting your investment. Insurance used to be something people handled right before closing. That's no longer realistic. With more coverage restrictions and rising premiums, it's become a critical part of the buying and selling process. When it's not addressed early, it can easily become the reason a deal falls apart.

If you're thinking about buying or selling, we can help you stay ahead of the insurance piece. We'll walk you through the steps, connect you with trusted providers, and make sure this part of the process doesn't catch you off guard. Call us at 615-315-9223 or email us at homes@fykesgroup.com to schedule a quick strategy session and protect your next move from costly surprises.