Is Your Home ‘Insurable’ to Today’s Buyers? What Sellers Need to Do Before Listing

In line with many other living expenses, home insurance has been rising over the last several years. According to the Consumer Federation of America, the average annual home insurance premium for a typical homeowner increased by an average of $648 across the country from 2021 to 2024. Home insurance in Missouri increased by an average of 12% during that time span, while Illinois home insurance increased by a whopping 50%.

It’s no surprise that these rising costs are affecting how buyers and their lenders scrutinize potential homes for insurability issues. And when sellers aren’t prepared, this can lead to frustrating delays or cancellations. Knowing what home insurance companies are looking for can prevent a lot of headaches in the selling process.

The rise in home insurance costs will likely have an effect on people trying to sell their homes in 2026. More buyers are taking home insurance costs and other hidden fees into consideration as they look for their new home. This means that they are paying close attention to any structural issues, the potential for flooding or storm damage, and safety issues in the neighborhood. 

Not only can these factors cause later headaches for buyers, but they can also increase their insurance rates from the start, and may even prevent some companies from insuring them at all. Sellers that don’t make their house “insurance-ready” before listing can run into problems, such as:

• Decreasing home prices - Insurance carriers pay close attention to homes that face risks from extreme weather events, as these homes are more likely to cost them money. The National Bureau of Economic Research found that insurance premiums for homes facing natural disaster risks were capitalized into home values, reducing home price growth in those areas by over $40,000. The St. Louis area is prone to severe storms, tornadoes, and flooding, all of which can affect insurance rates. So, homes that aren’t prepared for these events may not be worth as much as sellers hope to get from them.
• Renegotiations - Even if a house garners a lot of interest when it’s listed, buyers might start to reconsider after they get the results from their inspections. Sellers that don’t get a pre-listing inspection might not even be aware of the insurability issues their house has. Once the potential buyer finds out the house is going to cost them more than they thought, they will most likely want to renegotiate the terms. This can lead to additional requirements for the seller, such as monetary contributions for repairs or making repairs before closing. Ultimately, it leads to delays, frustration, and extra costs.
• Buyers backing out - If new terms can’t be agreed upon, the house is uninsurable, or the repairs are too much to deal with, buyers may back out entirely. If this happens once, it very well might happen again when the new buyer gets their inspection report. The best solution is to take a step back and fix any issues that are deterring buyers to ensure a smooth sale.

While buyers and insurance companies will find out about things like roof damage, electrical systems in poor condition, prior claims on the house, and previous flooding or hail damage, they can also take into account any measures to correct or prevent home insurance liabilities. To reduce the likelihood of nervous buyers backing out or unexpected demands in renegotiations, it’s best to make the house insurance-ready before listing. 

A good insurability checklist will help to make sure that any problems are dealt with before listing. Here’s where to look for problems or boost protection:

Roofs

Roofs are always a major consideration for buyers. No buyer wants to go through the hassle of replacing an old roof shortly after moving. Even worse, bad roofs often result in higher home insurance costs, limited coverage, or exclusions for roof damage. Replacing bad roofs or repairing minor damage will result in a higher selling price and smoother sale. Investing in hail resistant materials can make the home even more attractive (to both buyers and insurers).

HVAC Systems

Aside from the fact that buyers won’t want to deal with HVAC replacement soon after moving, these systems can also become an insurance liability when damage occurs from sudden, accidental events like fire, hail, lightning, or fallen trees or branches. Make sure HVAC systems are in good condition or upgrade to newer, safer units, add water sensors, and ensure regular maintenance before listing.

Electrical Systems

Older homes may have ungrounded or unsafe electrical systems. Updating the wiring and electrical systems can result in substantial savings by improving efficiency, and lowering the risk of fire damage—a major consideration for insurance companies.

Plumbing

It’s crucial to check older homes for faulty or leaky pipes, or issues with old septic systems and hot water heaters. Plumbing issues increase the risk of significant and costly water damage. Updating plumbing and replacing old pipes can reduce insurance premiums.

Theft Prevention

Incorporating theft prevention devices can help lower home insurance costs anywhere, but especially in areas with higher crime rates. Adding anti-theft measures, like security systems, motion sensing lights, or fencing, or highlighting those already present can make a house more attractive to potential buyers.

Potential Landscape Issues

Look out for potential hazards on the property, as well. Dead trees can fall onto the house causing damage, tree branches too close to the house can cause roof damage if blown off in a storm, and a lot of dry brush can be a fire hazard. Cleaning up these hazards will most likely improve curb appeal too, so it is certainly worth the effort.

Attractive Nuisances

While a swimming pool can attract some buyers, insurance companies might consider it an “attractive nuisance,” meaning it could attract children to trespass and get hurt. Trampolines, swingsets, or other dangerous equipment might be included in this category. Putting up appropriate fencing or simply getting rid of these items can reduce potential insurance liabilities.

Flooding Mitigation Measures

Sellers may not be able to prevent floods, but for those in areas prone to flooding, there are some measures that can be taken to protect the house from water damage—at least to some extent. Flood mitigation might include waterproofing the basement, adjusting landscaping in a way that directs water away from the home, or making sure drains and gutters are maintained.

It’s important to note that major home systems, like electrical, HVAC, plumbing, and the roof should be inspected by professionals with a pre-listing inspection or a 4-point inspection. These aren’t required before listing, but they can definitely speed up the time-to-contract after listing and reduce last-minute renegotiations or cancellations. Offering a home warranty is another option if the house has older appliances and home systems.

If you feel a little overwhelmed at the thought of incorporating another checklist into your home selling journey, that’s okay. Good realtors have been through every checklist involved in selling and buying homes a thousand times, so they are here to help.

The realtors at Berkshire Hathaway HomeServices Select Properties are experienced in making a home, not only looking its best before listing, but also making sure sellers are aware of any issues that might slow down the process. We’ll help you figure out a game plan and make sure you get what your house is worth. Contact us at an office near you to get started.