Around the Industry: Insurance Challenges and Rate Hikes (October 2025)
Reading time • 1 min
By Matic
New challenges are causing additional home insurance policy lapses across the U.S. The National Flood Insurance Program has officially expired, while bluelining has become the latest type of geographic exclusion in real estate. However, homeowners are gaining confidence with premium transparency as insurers increase use of aerial imagery on covered properties.
Stay ahead of both national and state issues impacting home insurance coverage and mortgage closings to help your loan customers navigate the long-term implications of these challenges.
National Flood Insurance Program expired as of October 1
Upcoming real estate deals could face challenges due to the National Flood Insurance Program expiring on October 1st. While FEMA will continue to pay out claims, new policies won’t be sold and expiring policies won’t be renewed.
That means homebuyers and owners with properties located in flood zones won’t have access to this federally subsidized coverage — potentially risking future mortgage applications.
Read more at the Insurance Journal
High-risk communities getting bluelined due to climate change
Geographic exclusion in real estate is not unheard of; historically, redlining was the discriminatory process of excluding Black neighborhoods from financial services like mortgages. The latest exclusion has been dubbed “bluelining,” which refers to entire communities losing access to financial services because of climate risk.
Insurance companies are the major players in bluelining, which has ripple effects across the homeownership spectrum. Without insurance in place, buyers can’t get mortgages and the entire community’s property values suffer.
Read the full report at ShelterForce.
Aerial imagery increases homeowner confidence in insurance premium transparency
A new survey from the Insurance Research Council reveals that homeowners appreciate the benefits of insurers using aerial imagery to assess properties. 90% of those surveyed recognized perks such as early detection of exterior issues and improved claims processing. 60% of homeowners are aware of insurers using this technology, generally skewing towards younger policyholders.
Get more details at Business Wire.
Illinois, Oklahoma take on insurance companies; New Jersey gives the greenlight for price hikes
- The Illinois/State Farm saga continues: The state of Illinois is now suing State Farm for refusing to submit homeowner data for regulatory review. The dispute began earlier this year when State Farm increased homeowners insurance rates by 27% in Illinois.
- Oklahoma Attorney General butts heads with state Insurance Commissioner: While Oklahoma’s Insurance Commissioner has defended insurers for increasing Oklahoma homeowners premiums, Attorney General Gentner Drummond blames the state’s lack of enforcement in preventing excessive price hikes.
- New Jersey insurers join in raising homeowner premium prices: New Jersey hosts 127 homeowners insurance companies and nearly half of them requested rate increases in 2025. So far, at least 50 companies have been approved. The largest approved rate hike comes from Founders Insurance Company, which will increase premiums by 23.6%.
