Builders and buyers are navigating a challenging environment for new home construction and purchases. Buyers’ budgets are stretched, with mortgages rates remaining stubbornly higher than they’ve been for most of the past two decades. On top of that, home insurance has become much more expensive and its availability less predictable, due to the increasing frequency and severity of weather-related events and inflationary pressures.

As a result, the average property insurance premium has increased more than 35% since 2020, with larger increases in high-risk areas. These trends are expected to continue, causing concern for potential homebuyers who wonder whether they can afford to insure their new home, if coverage is available at all.

While builders do not directly impact mortgage rates, there is a solution for providing insurance coverage and cost certainty to the homebuying experience—teaming up with an insurance expert like Westwood Insurance Agency who can embed insurance early in the buying process. There are several advantages this collaboration can offer builders throughout the development lifecycle, from help with site selection to customer support years after closing.

1.     Before Development: Planning to Manage Risk

The United States experienced 27 weather and climate disasters in 2024, each causing damages of at least $1 billion. Over the most recent five-year period (2020–2024), the annual average number of billion-dollar disasters was 23 events.

Rising catastrophe exposure has prompted many insurers to either pull out of or reduce coverage in high-risk states like California, Florida, Louisiana, and parts of Texas. This makes choosing the right locations for builders’ next new home communities more important than ever.

• Advising on location risks and insurability – Forward-thinking builders are incorporating insurance risk into land acquisition and planning phases. Westwood Insurance Agency leverages the latest data and technology tools to assess regions and properties for various hazards early in the development timeline to ensure projects on the drawing board are marketable and insurable for years to come.
• Recommending resilient construction – While site selection is important, building homes that are resilient to key hazards in the region is a sound strategy for enhancing buyer confidence and ensuring availability and affordability of insurance.

Westwood can offer insights on how specific materials affect underwriting and what mitigation features and documentation that insurers view favorably, then recommend strategies that may reduce or even prevent damage, including impact-rated roofing, fire-resistant siding and attic vents, and elevated mechanical systems.

Applying field-tested standards, such as the Insurance Institute for Business & Home Safety’s FORTIFIED Home™ program, can make a real difference in reducing damage from wind, wildfire, and water events, improving the home’s insurability, while often lowering premiums and strengthening lender confidence.

2.     During Sales: Keeping Closings on Track

Traditionally, securing home insurance has been a separate, often cumbersome process for buyers of new construction homes. After signing the contract, buyers often need to research insurance providers, compare coverage and quotes, and purchase a policy, a process that can feel time-consuming and confusing, especially for first-time buyers unfamiliar with home insurance. In today’s uncertain insurance markets, any surprises in coverage availability or high premiums can derail closing or blow the buyer’s monthly payment budget.

• Offering an embedded insurance solution – Embedded insurance is the game-changer that alleviates these pain points, representing a major shift in how insurance is offered and purchased. In the homebuilding industry, the embedded insurance model can secure home insurance early in the homebuying process. For example, Westwood can connect to the builder platform and get the required details about a community that facilitates the ability to deliver an instant quote to the homebuyer right after contract signing.

Instead of buyers scrambling to find coverage at the last minute, they get access right upfront to quotes for policies appropriate for their new construction home, and the approximate premium cost is known. The proven results for builders taking advantage of this approach can include fewer closing delays, a smoother buying experience, and peace of mind for the buyer. 

• Delivering time-tested expertise – In today’s insurance markets, experience matters when it comes to choosing an insurance agency. Westwood has been the premier expert in home insurance for new construction for more than 70 years. Today, dozens of the country’s top home builders work with us to insure more than 200,000 new homes each year, providing a high level of confidence for builders and buyers alike. Through relationships with more than 50 insurance companies, buyers can find coverage that meets their needs.

3.     After Closing: Delivering Exceptional Service

When builders and buyers place their confidence in an experienced agency to handle their insurance needs, they should have high expectations for superior service at every stage of the insurance policy lifecycle, for years to come.

• Providing the personal touch when it’s needed most – When life takes an unexpected turn, customers deserve an insurance agency that truly cares. Acting with speed and empathy means a lot to customers, so builders should work with an agency like Westwood, whose team knows exactly what to do and can guide homeowners every step of the way to help them recover. How well they deliver on the service promise is reflected in the agency’s Net Promoter Score^SM (NPS®), a respected third-party rating system. Westwood, for example, posted a 2024 NPS® of 92.  
• Conducting an annual coverage review – An agency’s regular insurance review with a customer is a helpful, value-added service that can quickly correct under- or over-coverage, as well as plug concerning policy gaps. For example, insurers typically have a default value for personal property coverage that is half of the property’s value; insureds may wish to purchase higher coverage. The review may also uncover liability risks related to a pool, a pet, or a teenage driver. Umbrella coverage can offer very affordable protection from potentially large legal liabilities.

If a homeowner is upset by a large premium increase or a non-renewed policy, there’s a good chance a licensed Westwood customer service representative has one or more quality options for replacement coverage from its broad insurance company partner network.

When builders take a proactive approach to managing insurance challenges with an expert like Westwood, they can make better community location and construction decisions, offer an embedded insurance solution that can lead to more on-time closings, and enhance their reputation through the agency’s ongoing commitment to customer service.

To learn more, visit Westwood Insurance Agency.