Factoring in Insurance Costs in 2025: What New Orleans Homebuyers Need to Know
- CR Office
- Apr 7
- 3 min read
If you're planning to buy a home in New Orleans in 2025, there’s one expense you can’t afford to overlook—insurance.
Between rising premiums, flood zone changes, and new state regulations, homeowners' insurance in New Orleans has become one of the most important (and costly) parts of the homeownership equation. Before you fall in love with that charming shotgun house or that Creole cottage with a courtyard, here's what you need to know.
1. Insurance Costs Are on the Rise in Louisiana
In recent years, insurance rates have surged across Louisiana, especially in coastal and flood-prone areas like New Orleans. Thanks to a mix of hurricane activity, inflation, and several insurers leaving the state, homeowners are facing higher premiums and fewer options.
In 2025, we’re still seeing the effects of:
Claims from Hurricanes Laura, Delta, Ida, and Zeta
Reinsurance costs are passed down to consumers
The continued departure of small and mid-sized insurers from Louisiana’s market
Pro Tip: Always get an insurance quote before making an offer on a home. What looks like an affordable monthly payment can change drastically once insurance is factored in.
2. Flood Insurance Is Practically Mandatory
New Orleans is below sea level, so flood insurance is often required by lenders. Even if it's not required in your zone, it's highly recommended.
FEMA’s Risk Rating 2.0 system—rolled out nationally and now fully in effect—changed how flood insurance premiums are calculated, and many New Orleans homeowners are seeing increases.
Here’s what impacts your flood insurance premium under Risk Rating 2.0:
Distance to water sources (like the Mississippi River or Lake Pontchartrain)
Elevation of your home
Type of foundation
Cost to rebuild the property
Helpful Tip: Ask for an elevation certificate during your inspection period. It can help you get more accurate flood insurance quotes.
3. Homes with Older Roofs or Systems May Cost More to Insure
Many of New Orleans' historic homes are beautiful—but insurance companies don’t always see them that way. Older roofs, outdated plumbing, and knob-and-tube wiring can all raise red flags and hike up your premium.
If you're considering an older property, factor in:
Whether the roof is up to code
If the home has storm shutters or hurricane clips
The age and condition of HVAC, plumbing, and electrical systems
Incentives exist for making storm-resistant upgrades, so ask your insurance agent about discounts for fortified roofs or wind mitigation features.
4. Bundling and Shopping Around Can Save You
Insurance rates vary widely by company, so it pays to shop around. Consider working with an independent insurance broker who can get you quotes from multiple carriers.
Also, bundling home and auto insurance can lead to solid discounts. If you’re working with a local lender or insurance broker, ask about bundle-friendly options.
5. Budget for Annual Increases
Even after closing, don’t assume your insurance rate is locked in forever. In 2025, many homeowners are seeing annual premium increases, some even in the double digits.
When budgeting for your mortgage payment, consider setting aside a buffer for future insurance increases. Some lenders require escrow reserves, and these can increase if your insurance bill jumps.
Bottom Line
In today’s market, insurance isn’t just a line item—it’s a major financial factor in buying and owning a home in New Orleans. Being proactive, asking the right questions, and working with knowledgeable professionals can save you thousands in the long run.
Disclaimer:
This blog post is intended for informational purposes only and should not be considered legal, financial, or insurance advice. Insurance rates, coverage, and regulations are subject to change and may vary based on individual circumstances and property location. Always consult with a licensed insurance professional or advisor to get accurate, up-to-date information tailored to your specific situation. The author and publisher assume no responsibility or liability for any errors or omissions in the content of this post.
