With rising insurance premiums and increasing challenges in placing property coverage in catastrophe-prone areas, agents and brokers must have proactive and comprehensive discussions with homeowners. Changing weather patterns, evolving risk profiles and stricter building code requirements demand a fresh approach to guiding clients through their coverage options.

Replacement Cost Valuations: Accuracy Is Everything

One of the most significant issues in the current market is ensuring that homes are insured to their actual replacement cost value.

"Outdated valuations can leave homeowners financially exposed after a loss," says Robbin Parsons, RPS branch manager.

"Encourage clients to verify the stated value of their property and ensure it reflects current construction costs, which have risen due to inflation, labor shortages and material price increases," he adds. "Work with clients to update their policy valuations regularly, especially for homes in high-risk areas where reconstruction costs may be higher."

Tailoring Policies to Individual Needs

The market is shifting toward more customizable Homeowners insurance policy options.

"Instead of the traditional policies typically issued, look at tailoring a policy to include only the coverages clients need," says Parsons.

Evaluate whether certain coverages — such as additional structures — can be removed to reduce costs. On the flip side, identify gaps such as insufficient personal property limits for valuable items, such as jewelry and collectibles, and recommend additional riders or floaters if needed.

Addressing Coverage for Emerging Risks

Changing weather patterns mean risks are no longer confined to traditional catastrophe zones. Areas previously unaffected by flooding, wildfires or extreme winds are now increasingly vulnerable. Highlight the importance of Flood insurance, even for properties outside FEMA-designated flood zones and other specialized coverages like wind and hail or earthquake protection.

"Educate clients on how evolving weather patterns could impact their property and recommend additional coverage options, even if not required by their mortgage lender," explains Parsons.

Updating Properties for Resiliency

In catastrophe-prone areas, the quality of construction can significantly impact a property's ability to withstand natural disasters. Updated building codes and fortified structures can reduce damage and potentially lower premiums.

"Share insights about how newer building codes, like Florida's hurricane resilience standards or fortified roof programs in Alabama and Louisiana, enhance a home's ability to weather storms," says Parsons. "Encourage clients to consider upgrades like impact-resistant roofing, reinforced walls or elevated structures to reduce risks and qualify for potential premium discounts."

Some states offer programs or grants to help homeowners implement resilience measures, such as upgrading roofs or retrofitting homes to meet stricter building codes.

Preparing for Higher Deductibles and Sublimits

With rising costs, insurers increasingly apply higher deductibles for specific perils (e.g., hurricane, wind or hail) and introduce sublimits for water damage, theft or other risks.

Explain to your insureds how these changes impact out-of-pocket costs after a loss and ensure homeowners understand their deductible responsibilities.

"Agents should work with clients to set realistic deductibles that balance affordability with manageable post-loss expenses," says Parsons.

Conducting a Holistic Review of Economic Exposure

Many homeowners fail to update their insurance policies as their financial circumstances or property holdings change. A periodic review ensures clients are properly covered. Meet with clients to assess their full economic exposure, including new assets (such as inherited jewelry or collectibles) or lifestyle changes (like a remote work setup that requires additional Liability coverage).

Reviewing Premium Trends

Insurance premiums have risen significantly due to increased claims severity, natural disasters and reinsurance costs. Parsons reinforces the need for transparency about market conditions and explaining to clients the reasons for premium increases while offering strategies to offset rising costs. You can recommend bundling policies, upgrading home features to reduce risk or exploring premium payment plans to make coverage costs more manageable.

Highlighting the Importance of Risk Mitigation

Reducing risks proactively can make a homeowner's property more attractive to insurers and prevent claims. Revisit the importance of installing security systems, maintaining landscaping to reduce wildfire risks and implementing water leak detection systems.

"The shifting insurance landscape demands thoughtful, proactive conversations between agents and homeowners," says Parsons. "Focus on accurate valuations, tailored policies and risk-mitigation measures to ensure clients are well protected while navigating premium increases and coverage challenges."

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