How builders can help their homebuyers secure home insurance. By Alan Umaly
The home insurance market has been significantly impacted by a surge in extreme weather events in recent years. As a result, it’s become harder for homebuyers to secure insurance in many parts of the country. Given these challenges, embedded insurance has emerged as an essential tool for builders to help their buyers obtain coverage. Builders who offer this reliable solution can save their customers a lot of time and provide them with peace of mind, knowing their new home is protected.
A hazard-challenged market
The rise in weather hazards such as wildfires, hurricanes, flooding, and earthquakes is causing major disruptions to the home insurance industry. The number of US natural disasters with damages over a billion dollars has increased, from an average of 3.3 per year in the 1980s to more than 17 per year over the past decade. Most recently, 2024 ended with 27 major weather disasters on record.
Consequently, this has contributed to the average property insurance premium going up more than 30 percent since 2020, and insurance options and costs vary widely by location. These trends are predicted to continue, causing concern for potential homebuyers who are wondering if they can afford to insure their new home. This is where embedded home insurance can be a game-changer.
A dependable home insurance solution
The embedded insurance model integrates insurance into non-insurance products or services. For example, a car dealer might connect customers with a source for obtaining car insurance when completing the purchase process. In the context of the home building industry, it means integrating home insurance into the homebuying process, making it a seamless part of the homebuying journey. It’s a transformative shift in how home insurance is purchased and provided.
Traditionally, securing home insurance has been a separate, often cumbersome process for homebuyers. After purchasing a new home, buyers need to independently research insurance providers, compare quotes, and finally purchase a policy. This process can be time-consuming and confusing, especially for first-time homebuyers unfamiliar with the complexities of home insurance.
By embedding insurance directly into the homebuying process, builders can alleviate these pain points for their customers. Builders who integrate insurance allow their customers to obtain a competitive quote during the signing of the purchase agreement, supplying them the expected insurance cost right at the beginning. This saves time for both builders and their buyers and takes care of the insurance step up front, providing confidence and certainty during a challenging market. At a time when the cost and availability of insurance may impact whether a buyer can move forward with the purchase, the price of coverage may be crucial information.
More builders of all sizes are starting to incorporate embedded insurance into new home purchases to enhance the customer experience and help buyers secure insurance early in the homebuying process. Homebuyers appreciate this service, and builders can establish buyer trust and differentiate themselves from the competition.
What to look for in an insurance agency partner
Builders who want to move to an embedded model should start by choosing an experienced home insurance partner. The right agency can significantly impact a builder’s business and the overall homebuying experience for customers. Look for an established agency with:
- Deep experience in the home building industry
- Coverage available in all states
- Competitively priced policies, even in the toughest markets
- Technology capabilities to link to a builder’s system and access all the information needed to pre-underwrite the home and provide an instant quote
- High customer service ratings, such as the Net Promoter Score. An insurance agency stays with customers through the life of their policies and providing exceptional service is central to maintaining a positive insurance experience
Embedded home insurance represents a significant opportunity for builders to enhance their service offerings and simplify the homebuying process. By integrating home insurance directly into the purchase journey, builders can help their buyers secure coverage more easily and efficiently, enhancing customer satisfaction and fostering stronger relationships. Given the challenging market conditions, embracing innovations like embedded insurance will be key to staying competitive and meeting the changing needs of homebuyers.
For a list of the sources used in this article, please contact the editor.
Alan Umaly is the President of Westwood Insurance Agency, a leading, full-service personal lines agency specializing in builder-sourced homeowners insurance. Established in 1952, Westwood has served more than one million homeowners through relationships with dozens of the country’s top home builders. It can offer insurance to more than 99 percent of the communities built by these builders by working with over 40 leading insurance companies. Westwood’s unique platform facilitates seamless home closings by connecting builders, carriers, lenders, and homebuyers with click-to-bind technology.