Don’t Look at the Home Price Alone

Why Today’s Buyers Must Factor in Home Insurance Costs

When buying a home, most buyers focus on two numbers: the purchase price and the mortgage interest rate. But in today’s market, there’s a third cost that can no longer be ignored—homeowners insurance.

Across the U.S., home insurance premiums are rising rapidly. This isn’t a temporary spike; it’s a structural, long-term trend. Buyers who fail to include insurance costs in their budget risk seriously underestimating their true monthly housing expense.

Why are home insurance premiums rising?

The primary driver is the increase in natural disasters. More frequent heavy rain, strong winds, snowstorms, fires, and extreme weather events have led to a surge in insurance claims nationwide.

At the same time, repair costs have skyrocketed. Building materials and labor costs are both significantly higher than they were just a few years ago. As a result, each insurance claim now costs insurers far more to settle.

To maintain profitability and manage risk, insurance companies have little choice but to raise premiums—and that cost is ultimately passed on to homeowners and buyers.

What buyers are experiencing in real life

In the past, insurance was a relatively minor part of monthly housing costs. Today, it has become a meaningful line item, right alongside principal, interest, taxes, and HOA fees.

More buyers are now surprised—sometimes shocked—when they receive insurance quotes during the home search process. In some cases, insurance costs alone have caused buyers to:

• Reconsider a specific home

• Change target neighborhoods

• Adjust home size or property type

Insurance is no longer a background expense. It can directly influence purchasing decisions.

Insurance costs vary widely by location

Home insurance premiums differ dramatically depending on where the home is located.

Areas with higher exposure to weather-related risks tend to carry higher premiums. Even homes with similar prices can have annual insurance costs that differ by thousands of dollars based solely on location.

While Chicago and much of Illinois remain more stable than coastal or hurricane-prone regions, the Midwest is no longer immune to climate-driven risk reassessments. Insurance increases are becoming harder to avoid—even in traditionally “safe” markets.

This makes it essential for buyers to evaluate local insurance conditions, not just home prices.

Practical ways buyers can manage rising insurance costs

While rising premiums can’t be fully avoided, buyers can reduce their impact with smart planning:

• Compare multiple insurance quotes

  
  

  Each insurer evaluates risk differently. The same home can produce very different premiums depending on the provider.

• Bundle home and auto insurance

  
  

  Many insurers offer meaningful discounts for bundled policies.

• Pay attention to home condition

  
  

  Newer or well-maintained roofs, updated systems, and security features can positively affect premiums.

• Get insurance quotes before finalizing the contract

  
  

  This is the most important step. Knowing the real insurance cost upfront prevents unpleasant surprises after closing.

The mindset today’s buyers need

In today’s housing market, success isn’t about buying the cheapest house—it’s about creating a sustainable long-term cost structure.

Insurance premiums are unlikely to fall meaningfully in the near future. Buyers who plan using only price and interest rate are setting themselves up for stress later.

Smart buyers calculate the real monthly cost:

• Mortgage

• Property taxes

• Insurance

• HOA and maintenance

That’s how you avoid buying a home you later regret—not because of the house itself, but because of the ongoing financial pressure.

Final thoughts

Buying a home isn’t just signing a contract—it’s committing to a multi-year living cost structure.

Insurance may feel like a hidden or secondary expense, but today it’s a critical variable. Helping buyers see the full financial picture—especially costs that aren’t obvious at first glance—is what truly protects them in the long run.

If you’d like to estimate the real monthly cost of a home you’re considering—including insurance—I’m happy to walk through the numbers with you.

Chicago Bokdeokbang | Sang Chul Han📞 773-717-2227✉️ ChicagoBDB@gmail.com