Bergen County’s luxury real estate market has undergone notable changes in recent years, with 2025 presenting some of the most challenging conditions since the early 2000s. While sales dat...
Insurance Costs Emerging as Top Deal-Breaker in Waterfront Property Sales
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Date:
13 Aug 2025
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The rising cost and complexity of insuring waterfront properties is fundamentally reshaping coastal real estate markets, according to Kevin Donovan, a waterfront specialist broker with COMPASS.
The Insurance Tipping Point
“Insurance considerations have become a critical factor in waterfront transactions, often influencing both pricing and buyer decisions,” Donovan explains. The veteran broker has observed a significant shift in how insurance concerns are affecting deals, with some buyers walking away even from dream properties when faced with insurance challenges.
According to Donovan, this represents a marked change from previous years when insurance was often treated as an afterthought in luxury waterfront transactions. Now, it’s becoming a central part of early discussions with potential buyers.
The New Due Diligence
The traditional approach to waterfront property evaluation focused primarily on location, views, and amenities. However, Donovan notes that today’s buyers are conducting extensive insurance-related due diligence before making offers:
- Investigating flood zone classifications
- Reviewing historical premium trends
- Assessing potential mitigation requirements
- Evaluating multiple insurance carrier options
“The waterfront market has fundamentally shifted in the past decade. We’re seeing buyers who are much more conscious of environmental factors and long-term sustainability,” Donovan observes.
Market Impact and Adaptation
This heightened focus on insurance is creating ripple effects throughout the coastal property market. Properties with favorable insurance profiles are commanding premium prices, while those with challenging insurance situations face longer marketing periods and price adjustments.
Donovan’s team has adapted their approach accordingly, now working closely with insurance specialists early in the process to help buyers understand their options. “We’re essentially becoming part-time insurance consultants,” he notes, highlighting how the role of luxury real estate advisors has evolved.
Looking Ahead
As climate concerns continue to influence coastal property markets, Donovan suggests that insurance will likely become an even more critical factor in waterfront real estate. Smart buyers and sellers are already adapting to this new reality, with some owners proactively making improvements to their properties to secure better insurance rates.
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