Homeowners Insurance in 2025: What Homeowners Need to Know – Part Two

If you thought homeowners’ insurance was tricky before, 2025 is really keeping us on our toes. In Part One, we broke down why rates are climbing and what’s behind all the changes. Now in Part Two, we’re getting into the real-world stuff—what you can actually do about it.

We’ll talk about easy-to-miss coverage gaps, what the claims process looks like these days (spoiler: it’s a lot more digital), and how to snag discounts wherever you can. Plus, we’ll share some smart home maintenance tips to help keep your costs down, and we’ll wrap it all up with a simple checklist to make reviewing your policy less overwhelming.

Ready to feel a little more in control of your insurance? Let’s jump in!

Liability Protection: Don’t Get Sued

Liability coverage is the part of your homeowner’s policy that kicks in if someone is hurt on your property or you accidentally damage someone else’s property. It’s as important as dwelling coverage because lawsuits can come out of nowhere. Standard policies commonly include $100,000 of liability coverage. That sounds like a lot, but many experts suggest carrying at least $300,000 to $500,000, depending on your assets​.

While most policies start at about $100K, you should bump it up based on your wealth and risk. For example, if you have a six-figure house or savings, a $100K judgment could wipe you out.

If you want extra peace of mind, consider an umbrella policy, which is an inexpensive way to get millions in extra liability coverage on top of your home and auto policies. Major insurers sell umbrella policies that kick in where your standard limits leave off.

In 2025’s litigious climate, liability protection is no joke. A slip on your walkway or a trampoline injury can trigger a lawsuit far exceeding the minimum coverage. So, when reviewing your policy, confirm your liability limits (often named “personal liability” on the declarations page) and raise them if they don’t match your financial situation. You can usually add coverage in increments (e.g. $100K to $500K) with just a small increase in premium.

In fact, talking to a local insurance expert is one of the best moves you can make when it comes to protecting your assets.

Floods, Earthquakes, and Other Gaps

The National Flood Insurance Program (NFIP) is the main flood insurer for homeowners. It has transitioned to a new risk-based pricing model: by law, NFIP premiums can’t jump more than 18% a year, but older policies are being “phased up” to full risk rates over time. FEMA emphasizes that flood insurance costs reflect each property’s unique risk, factoring in elevation, proximity to rivers, mitigation measures, and more.

One thing to watch: NFIP requires periodic reauthorization by Congress (extended through Sept. 2025), so keep an eye on news in case any lapses halt new flood policies.

One of the biggest surprises for new homeowners is that flood damage is not covered by ordinary home insurance. For instance, if a storm surge floods your basement or river overflows onto your property, your HO‑3 policy won’t pay a dime. To get that protection, you must buy a separate flood policy, typically through FEMA’s NFIP or a few private insurers. Flooding frequency in New England is increasing, with projections indicating that 100-year flood events may become more frequent, occurring every 10-20 years by 2050.

Similarly, earthquake damage is excluded unless you add an earthquake endorsement or buy a separate quake policy. Some lenders require quake insurance in active zones. In many regions, these supplemental policies are expensive because the risk is high.

Pro tip: Standard policies cover most natural disasters except losses from flooding or earthquakes.

This “insurance gap” means homeowners often find out too late that they weren’t covered for a peril they assumed was included.

Bottom line: if you live near water, get flood insurance now. It’s the smartest way to protect your home in the event of a flooding disaster. The same goes for seismic zones. It’s better to have those separate riders and (hopefully never need them) than to face an uncovered disaster.

The Modern Claims Process: Digital and Delayed

If you do have to file a claim, it’s easier than it used to be. Many insurers now offer mobile apps and online portals to streamline claims. A Deloitte/industry study notes that claims handled via digital tools have jumped from only single digits a few years ago to about 55% of all claims today.

That means you can often take photos of damage, submit them through an app, and get quick status updates. Some insurers even use drones or AI to estimate damages remotely. As a homeowner, this digital shift is a plus: it can speed up small claims and let you track the process.

Document everything in advance. Take video walkthroughs of your home and upload them to cloud storage​. Keep receipts or a spreadsheet of expensive items. This way, if you do have to file a claim, you have proof of your belongings’ value and condition – speeding up the settlement. Also, use the insurer’s app right away after a loss. Quick photo documentation (and possibly a virtual adjuster visit) often speeds up the preliminary damage estimate.

However, the pandemic and supply chain snarls have revealed a downside: when catastrophe strikes, claims get backlogged. According to J.D. Power’s 2024 Property Claims Study, customer satisfaction is at a 7-year low because storms have become so frequent that repairs and payouts are taking longer than ever. For large losses (like a roof blow-off or total fire loss), insurers report average claim cycles of 23.9 days just to complete repairs – well above optimal. This delay is partly due to shortages of contractors and materials. In other words, don’t expect super-speedy fixes after a major disaster, and plan accordingly.

Finally, remember: if your claim causes your rate to rise – many companies increase costs after large claims – you have the right to shop around. Insurance agents regularly advise consumers to compare quotes, especially if rates have jumped​. Competition can help keep your premiums in check.

Bundling and Discounts: Saving Where You Can

With premiums high, it’s worth maximizing every discount. One of the easiest is bundling your home and auto (or other) insurance with the same carrier. Many companies offer 10–30% discounts for bundling. For example, NerdWallet reports that insurers may advertise bundling savings up to 30%, which could save you over $1,200 per year.

Aside from bundling, ask your agent about other discounts you may qualify for:

• A new roof
• Storm-resistant windows
• Alarm systems
• Smoke detectors
• Fire extinguishers
• Retired military or elder discounts
• Loyalty (multi-year) discounts
• Even good grades for student family members.

Each insurer has its own menu of savings, but common ones can knock off as much as 10–20% if you qualify.

Another proven strategy is raising your deductible. For example, increasing your out-of-pocket deductible from, say, $1,000 to $2,500 could substantially cut your premium. Just be sure the deductible remains affordable if you do have damage.

And don’t overlook credits: sometimes insurers reward claim-free years or home upgrades. It never hurts to call your agent yearly and run through your policy to see which discounts you’re missing.

Proactively shop around and analyze the pros and cons of mix and match discounts. Even a few percentage points add up. Just remember that cheaper isn’t always better: make sure you’re still getting the coverage you need when hunting for bargains. Expert advice can help you come to the right decision for your unique set of circumstances.

Home Maintenance and Safety: Keep Your Premiums Low

How well you take care of your home can impact your homeowners’ insurance rates. Insurers care if you keep up the house and reduce hazards. Regular maintenance can sometimes earn you a break on premiums or at least prevent claim headaches later. For example:

• Roof and Gutters: Clear leaves and debris from gutters and trim overhanging branches. A well-maintained roof is less likely to leak (water damage claims can be denied if long-term neglect is found). In high-wind areas, a re-roof with hurricane straps or impact-resistant shingles may lower your rate.
• Utilities: Maintain plumbing and electrical systems. Burst pipes from frozen fixtures or old wiring causing fires are all too common. Ensuring these are in good shape avoids both disasters and coverage disputes.
• Fire Safety: Install smoke alarms, carbon monoxide detectors, and fire extinguishers. Some insurers give credits for modern detectors and home sprinkler systems.
• Trees and Landscaping: Trim dead limbs and diseased trees that might fall on your house or fences in a storm. Fallen trees drive up loss severity.

Why bother? Because insurance companies reserve the right to deny a claim if damage was caused by your negligence. For example, if a termite-ridden roof collapses during a windstorm, an insurer might argue you “should have known” and fixed it. Legal experts note that failure to properly maintain a property can be used to justify a denial. In short: don’t give your insurer an excuse to not pay up fully.

On the positive side, mitigation investments can actually earn discounts. Federal programs like FEMA’s Hazard Mitigation Grant Program pay homeowners to elevate or storm-proof houses in flood-prone areas. Check if your community offers credits (for example, some places reward homes with verified flood-proofing or those in good Community Rating System cities with lower NFIP rates. Even simple things – like getting your pipes drained before winter – show you’re reducing risk.

In the end, a well-cared-for home not only keeps repair costs down, but it can also keep your insurer happy and reduce your rates.

12 Homeowners’ Insurance Tips for 2025

Putting it all together, here are concrete steps you should take when reviewing your homeowner’s insurance in 2025:

#1 – Double-Check Your Coverage Amounts: Ensure your dwelling coverage matches current replacement cost, not just market value. Update it after any renovation or major purchase. Consider an inflation guard clause.

#2 – Review Personal Property Limits: Inventory your belongings and compare to your contents coverage (often 50–70% of the home limit). Add riders for any pricey items (jewelry, art, collectibles).

#3 – Raise Your Liability: If you haven’t checked in a while, consider boosting personal liability to at least $300K (or higher if needed). Think about an umbrella policy if you have significant assets.

#4 – Add Flood/Quake Coverage If Needed: Especially in coastal or seismic zones. Don’t assume you’re covered – you likely need separate insurance for those perils.

#5 – Shop and Compare: Don’t renew without getting at least one or two competitive quotes. Premiums are changing quickly, so a competitor might be much cheaper (or more expensive) than last year. Don’t forget to talk to independent agents​ as well.

#6 – Bundle Policies: If you have auto or other insurance, call your provider and ask about bundling discounts (or consider switching to one carrier for both auto and home). It can save a solid chunk.

#7 – Adjust Your Deductible: Evaluate if you can afford a higher deductible in exchange for lower premiums. This is especially worthwhile if you rarely file small claims.

#8 – Use Technology: Download your insurer’s app and/or the FEMA “DigitalVault” or NAIC home-inventory app. Store photos/videos of your home and belongings in the cloud. This preparation pays off during claims.

#9 – Stay on Top of Maintenance: Perform regular home upkeep to avoid claim denials. Keep records of maintenance (receipts for a new roof, receipts for service calls, etc.), as insurers may ask for proof if you file a claim.

#10 – Educate Yourself on Policy Details: Read your policy and ask questions. Key terms: replacement cost, actual cash value, named perils vs. all-risk, roof age cutoff, etc. If something is confusing, call your agent. For instance, check if your policy has any special deductibles for hurricanes or wind in your state.

#11 – Watch Legislative Developments: Stay aware of any changes in your state’s insurance laws. Some states change how they allow rate increases, or how FAIR plans operate.

#12 – Check Federal Programs (Flood, Mitigation): If eligible for NFIP discounts (like elevating your house) or FEMA home-hardening grants, take advantage. Also remember the NFIP reauthorization deadline (Sept 2025) – plan purchases accordingly. By following these tips and staying informed, you’ll be better prepared to handle the challenges in today’s homeowners’ insurance market.

Homeowners Insurance Review Checklist for 2025

Before you renew or buy a policy this year, run through this checklist:

☐ Update Dwelling Coverage. Verify your home’s rebuild cost and insure for at least 100% of that amount.

☐ Check Personal Property Limits. Take inventory of possessions; raise coverage or add riders for valuables.

☐ Verify Liabilities. Ensure personal liability (and medical payments) limits are sufficient. Consider an umbrella policy if you have large assets.

☐ Assess Exclusions. Know what’s not covered (flood, quake, sewer backups, mold, etc.) and buy separate policies if needed.

☐ Compare Quotes. Shop around or work with an independent agent to compare premiums and coverage options from different insurers.

☐ Bundling/Discounts. Ask your insurer about bundling (auto+home) and all available discounts (security system, claims-free, senior, etc.).

☐ Review Deductibles. Adjust your deductible level to balance premium savings with what you can pay out-of-pocket in a claim.

☐ Document Your Home and Belongings. Create a home inventory (photos/videos) and store it online. Update it annually.

☐ Maintain Your Home. Fix small issues now to avoid big claims later. Keep records of repairs and upgrades for the insurer.

☐ Understand Your Claim Process. Familiarize yourself with how to file a claim (app, phone, agent). Know your policy number and keep emergency funds for the deductible. ☐ Stay Informed. Monitor local weather/climate news and insurer announcements. If your insurer raises rates significantly, don’t hesitate to look elsewhere or switch carriers if needed.

Final Thoughts

Navigating homeowners’ insurance in 2025 isn’t exactly a walk in the park—but it doesn’t have to be overwhelming, either. With rising costs, changing risks, and new digital tools, staying informed and proactive is more important than ever.

The good news? You have more power than you might think. By knowing where your coverage gaps are, keeping your home in good shape, shopping smartly, and using the checklist we shared, you can protect your home—and your wallet—without losing sleep over it.

Insurance may be evolving, but so are the ways you can stay ahead of the curve. A little extra effort today can save you a lot of headaches (and money) down the road.

Need to learn more about homeowners insurance?

Our agents are ready to help, so contact us to learn how we can customize your insurance policies to meet your needs.

*Disclaimer: We offer content for informational purposes; Co-operative Insurance Companies may not provide all the services or products listed here. Please get in touch with your local agent to learn how we can help with your insurance needs.

Sources

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CBO.gov. Climate Change, Disaster Risk, and Homeowner’s Insurance. https://www.cbo.gov/system/files/2024-08/59918-Climate-Change-Insurance.pdf

CBS News. Climate change, extreme weather are driving up homeowners’ insurance rates in Chicago and beyond. https://www.cbsnews.com/chicago/news/climate-change-extreme-weather-homeowners-insurance-chicago

Consumer Federation of America. How to Save Money on Homeowners Insurance. https://consumerfed.org/how-to-save-money-on-homeowners-insurance

FEMA.gov. Cost of Flood Insurance for Single-Family Homes under NFIP’s Pricing Approach. https://www.fema.gov/flood-insurance/work-with-nfip/risk-rating/single-family-home

Insurance Journal. Why US Home Insurance Rates Are Rising Fast – Climate Change Plays a Big Role. https://www.insurancejournal.com/news/national/2024/09/26/794409.htm

Insurance.com. How much personal liability coverage do I need? https://www.insurance.com/home-insurance/personal-liability-coverage/how-much-personal-liability-coverage-do-i-need

JD Power. U.S. Property Claims Satisfaction Study. https://www.jdpower.com/business/press-releases/2024-us-property-claims-satisfaction-study

Nerd Wallet. 6 Best Auto and Home Insurance Bundles for April 2025. https://www.nerdwallet.com/insurance/homeowners/best-home-auto-insurance-bundles

Reuters.com. US home insurance costs more expensive in areas of climate risk, study finds. https://www.reuters.com/world/us/us-home-insurance-costs-rose-more-steeply-areas-climate-risk-us-treasury-dept-2025-01-16

State Farm. Replacement Cost vs Market Value. https://www.statefarm.com/simple-insights/residence/replacement-cost-vs-market-value

Vermont.gov. July 2024 Vermont Flood Resources. https://www.vermont.gov/flood#gsc.tab=0

WMUR. New Hampshire’s summer of 2024 marked by record-breaking heat, severe storms. https://www.wmur.com/article/new-hampshire-summer-2024-heat-storms-100324/62503775