Home insurance premiums surged an average 8.8% last year, with rate increases in disaster prone areas topping 50%. Whether these increases are the result of higher replacement costs, climate change or reinsurance charges, the result can mean deals falling apart at the closing table.
If you’re like many home builders, you’re looking for ways to reassure nervous buyers, eliminate any possible deal-breaker and set yourself apart as a thoughtful, proactive partner. One strategy many builders prefer is to address the issue upfront: Embed a home insurance quote with the purchase contract. The early offer clears up uncertainty and reduces the risk of closing disappointment.
“Embedded home insurance isn’t new. The difference today is the priority placed on it. Home buyers appreciate a builder that has their best interests at heart, including home insurance,” explains Tom Kriby, a 20-year insurance veteran and vice president of client development and partnerships for Westwood Insurance Agency, a company that works with 15 of the nation’s top 20 home builders.
There’s plenty of news coming out of Texas, California and Florida to put home buyers on edge. Many other states including Idaho, Colorado, South Dakota, Nebraska and Louisiana, among others, have seen home insurance rates spike in the last year. Despite this, there’s cause for builders to be encouraged this year and next. Kriby notes several positive developments:
• Positive Industry Response. “The cost and availability of reinsurance, which influences what insurance carriers charge, appears to be moderating,” Kriby reports. “That may help ease the pressures on home insurance rates.”
• Better Policy Customization. Some state insurance regulators are becoming more flexible on home insurance policy modifications. This can further help insurers maintain affordability and availability.
• Resilient Construction. More rigorous building code has shown tougher minimal standards help reduce structural losses, as Florida and other gulf coast states have shown. New, code-compliant construction is far more resilient to adverse weather than older homes.
• Satisfied Home Buyers. Embedded home insurance works. About half of all home buyers who receive a quote from Westwood accept it outright, Kriby says. The other half shop the quote before closing. “But most discover it was the best deal to begin with,” he adds, noting some buyers have saved hundreds of dollars per year by going with the Westwood quote.
• Easy Process Implementation. Westwood helps builders close more than 100,000 new homes each year. “The implementation process for embedded home insurance is surprisingly easy and straightforward,” Kriby says. “We were started by a home builder more than 70 years ago to serve new builders of all sizes, from small to large. We know the home building business; it’s our specialty.”
• 40+ Carriers, All 50 States. Builders who embed home insurance via Westwood can count on offering a quality policy on any home, in any location, in just a few clicks. If one insurance carrier isn’t a good fit, it’s likely others are from Westwood’s roster of more than 40 carriers. “There are options,” Kriby affirms.
Don’t jeopardize a deal over home insurance. It’s never been easier, smarter or more practical to offer your buyers home insurance certainty with an embedded solution.
Learn how you can simplify new home purchasing with home insurance availability and affordability.
