Buyer Angst Puts Home Insurance At The Center Of The Purchase

In today’s market, the buyer standing in your model home isn’t just asking, “Can I afford this?”

They’re questioning: “Will anyone insure it – and how will that affect my payment and resale?”

In a cycle where climate risk, hidden ownership costs, and sour sentiment cause as much damage as mortgage rates and asking prices, that’s no longer just a back-office issue.

It’s a fundamental brand question. The builders who treat insurance as core to their promise – not paperwork – will appear safer, smarter, and more trustworthy than those who don’t.

Call it what it is—a competitive edge.

The anxiety has shifted – and insurance is at the center of it

The last few years have turned what should be a joyful milestone into a stressful exercise in risk management. Amanda Taylor, VP of Communications and Marketing at Westwood Insurance Agency, describes how the emotional journey of buying a new home has reversed.

“Especially with new construction, you know you’re getting a brand new, beautiful, clean, modern house. It should evoke all the positive feelings that come with it. However, in recent years, that has changed. Now, people experience more fear and negative emotions… ‘Can I afford this house?’ ‘Am I buying at the right time?’ If I buy it, can I get insurance? What will that cost?” she says. 

“Those layers of concern and self-doubt take what should be a very happy, exciting time and make it a stressful, uncertain time.”

That uncertainty isn’t just a vague idea. It’s now solid evidence:

• A new NBER analysis of 74 million escrow payments shows that homeowners’ insurance premiums have risen considerably since 2021, with the transfer of disaster risk into premiums more than doubling from 2018 to 2024. A “reinsurance shock” alone added about $425 to the typical 2024 annual premium and lowered the value of nearby homes by approximately $43,900 in the most disaster-prone ZIP codes. 
• Zillow research shows homes with high flood risk are less likely to sell, take longer to go under contract, and sell at bigger discounts — high-flood-risk listings from June 2024 sold for about 6% below the initial list price compared to 3% below for low-flood-risk homes, and a much larger share never sold at all.
• In the same period, a Wolfe Research deep dive into state-level data and Michigan sentiment surveys finds that demand weakened in 2024–2025 even as headline affordability modestly improved – traffic fell while rates and net prices eased. Sentiment, inventory, and “hidden” ownership costs like insurance, taxes, and repairs are now causing the issues, not just rate math.

In simple terms, buyers have come to understand that the world is riskier. They now assume bad news about insurance until proven otherwise.

Climate information is no longer buried – buyers are acting on it

At the same time, climate risk is shifting from background noise to an active factor in search and pricing.

A single NBER field experiment with Redfin shows that when buyers see property-specific flood scores, offers on medium- and high-risk homes decrease by 35% to 58%, and sale prices for high-risk properties drop by about $7,000 in the affected market segment — with an extrapolated impact nearing $85,000 if applied across the entire market.

Zillow’s data – which now links to First Street’s Climate Risk website — aligns: over 80% of homebuyers now consider climate risk in their search, and homes with higher climate risks tend to sell more slowly and at larger discounts, even though many of these properties still have higher listing prices due to their location and features.

Layer on the Keys–Mulder “reinsurance shock” – which shows premiums and home values being repriced fastest in areas where disaster risk is rising, not stable – and you get a clear message for builders:

If buyers can’t easily see that your homes are insurable and adequately covered, it can create uncertainty that may affect their purchase decisions.

From “compliance line” to proof point of your promise

Most builders still handle insurance “by muscle memory,” treating it as an afterthought at the end of the process – just a box to check between the final walk and closing. Taylor views that as a serious oversight.

“This is an opportunity for builders to use insurance as a proof point of their brand, demonstrating their promise to customers,” she says. “That starts by bringing it in earlier in the process—being able to provide a quote months before moving into the house, and even while touring the model home before signing a contract.” 

The team at Westwood Insurance Agency feels that pull from the field.

“We constantly hear from new home consultants how much they use our rate sheets because their prospective buyers are craving transparency,” Taylor says. “They can literally show someone a quote while they’re walking through the model home, proving we are actively insuring homes in this community at this price.”

In other words, insurance becomes part of your sales story: We don’t just promise quality and value. Here is the actual cost of protecting this asset, in this location, with this coverage, from an insurance agency that specializes in insuring new homes.

That shift does two things:

• It converts a floating fear (“What if I can’t get insurance?”) into a hard fact (“Here’s your quote; here’s what’s covered.”)
• It ties that relief directly to your brand instead of to a random outside agent.

Taylor calls out the missed opportunity when builders don’t do this.

“When you use insurance and insurability as proof points for your brand, you’re saying, ‘We’re not just the company that built this house. We’re the company that knows you can insure it at this coverage level, in this market.’ You shift from, ‘I hope I can insure this home’ to ‘Here’s your quote. Here’s your coverage.’”

That’s not a compliance outcome. That’s a brand outcome.

In an anxious market, “I can talk to a person” still matters

This plays out in what Harvard Business Review calls a “high-anxiety” service environment. Their research shows that when anxious customers are pushed into pure self-service for high-stakes decisions – finances, healthcare, major purchases – they tend to feel less satisfied with their choices, even when they make good choices. They trust the provider less as a result. But simply giving them access to a human – an expert or even a peer – neutralizes much of that effect, even if they never actually use the option.

Taylor’s experience directly relates to this modern, tech-oriented factor. She’s a champion of embedded, digital-first tools – QR codes in the model, portals, pre-filled links, and emails – but not in isolation. The goal is a fast, human-backed digital experience that wraps around the most stressful part of the deal.

“When you can get a quote sent to you from an insurance agency your builder already works with, there’s no 20-minute phone call or ‘Let me get back to you in a couple of days,’” she says. “Which company do you think they’ll remember when their friends ask what it was like to buy new?” 

“When they go to closing, they shouldn’t even be thinking about insurance,” Taylor says. “That part should feel finished and taken care of. They should be excited about getting their keys.”

And when that process works as intended, insurance shouldn’t be a lingering concern by the time the buyer walks into the closing room.

That’s precisely what the HBR work says you want: anxiety channeled into confidence, and confidence flowing back into trust in your brand.

Local risk, local story: price vs. availability

Not every market is like Louisiana, Colorado, or coastal California, but the same forces affect every market.

Keys and Mulder show that the reinsurance shock varies: premium increases and home-price drops are more significant in ZIP codes with higher climate risk, and in some areas, insurance now makes up 20–30% of monthly housing payments. Zillow’s climate research indicates that high-risk homes in Florida, Texas, and Alabama face clear pressure on both time on market and list-price discounts.

Taylor notes that this changes the way the “win” is defined in each market.

“In some places, the value proposition is, ‘We can get you a competitive premium.’ In others, it’s literally, ‘We can get you coverage at all,’” she says. “The common thread is confidence in insurability. That’s what makes or breaks a deal in the high-risk markets.”

That’s where a partner like Westwood – connected to multiple carriers, constantly adjusting prices, and deeply involved in local risks – becomes part of the brand story, not just the back-end process. The co-branded message isn’t “Buy our house, call your agent.” It’s:

• “We build here because we understand the risk, and we’ve designed for it.”
• “We’ve already confirmed that homes like this, on this site, with this specification, are insurable.”
• “Here’s the actual quote and coverage, today.”

What “winning on insurance” actually looks like

For builders, transforming insurance into a brand asset in 2026 and beyond appears less like a technology project and more like a series of tangible steps.

1. Bring insurance to the forefront of the process. Highlight insurability and estimated premiums directly in your online listings rather than treating them as an afterthought. In markets exposed to climate risks and insurance challenges, the insurance story can become a selling point, helping buyers feel confident and informed as they make decisions.
2. Turn transparency into a sales advantage. Use rate sheets by community, plan, and elevation. Let buyers scan a QR code in the kitchen to see an actual quote.[KT1] [JM2] 
3. Keep humans visible. Incorporate digital flows, but always display the name and contact details of a real person behind them. The research shows: anxious buyers don’t just want tools; they want reassurance that someone is there if they get stuck.
4. Measure the liftand track.
   • Conversion rates for Buyers who receive an early insurance quote versus those who don’t.
   • Cancels and fall-outs related to insurance surprises.
   • Buyer-experience scores on “confidence in total monthly cost” and “clarity about climate and insurance risk.”
     Over time, you should be able to show that improved insurance readiness leads to fewer lost deals, fewer renegotiations, and a stronger referral story.
5. Let risk and resilience shape your brand, not haunt it. In markets where climate and insurance issues are already eroding values, ignoring those problems simply hands the story over to the evening news and social media horror stories. Builders who analyze the data, plan for resilience, and demonstrate their understanding of insurability will appear more responsible.

“We’ve got you covered” is now a brand position

For the next phase of this cycle, it’s not hard to imagine two categories of builders emerging in every market:

• Those whose buyers tell friends, “We had no idea what insurance would look like until closing. It was stressful and expensive.”
• And those whose buyers say, “They showed us exactly what insurance would cost and cover before we signed. We felt taken care of the whole way.”

Taylor is crystal clear about which group will win.

“When you can offer insurance well before the deadline and remove that level of uncertainty and fear,” she says, “you’re bringing this interaction with your brand back to a positive experience, that positive emotion.”

In a marketplace where sentiment, climate, and insurance shocks are eroding trust, that is what a brand truly is: the feeling buyers experience when the stakes are highest.

Builders who choose to own that moment – and select partners to help them do so – won’t just be ticking a box. They’ll be succeeding with insurance and branding.