It’s no secret that life by the water comes with a price—but lately, that price has been rising in ways that are changing the game for coastal real estate. In Newport County and across Aquidneck Island, homeowners and prospective buyers are facing an increasingly costly reality: insurance premiums have quietly jumped by 25% to 40% over the last five years. And while this trend might not make headlines as often as rising interest rates or soaring home prices, it’s having a serious impact on who can afford to buy and maintain a home near the water.
Several factors are driving these increases, but they all tie back to one unavoidable truth: it’s getting more expensive—and riskier—to live by the coast. The cost of housing in Rhode Island has climbed steadily in recent years, which means higher replacement values for insurers to cover. At the same time, inflation has driven up the cost of labor and materials, making it more expensive to repair or rebuild homes damaged by storms or flooding. As a result, insurance companies are recalculating their exposure, and those costs are getting passed on to homeowners.
Another major contributor is climate change and the growing frequency of weather-related catastrophes. Rhode Island is increasingly vulnerable to hurricanes, nor’easters, storm surges, and rising sea levels. As insurers become less tolerant of this elevated risk, they’ve either exited high-risk markets altogether or raised premiums to account for the likelihood of costly claims. This lower risk tolerance isn’t just about protecting their bottom line—it’s a reflection of new modeling and long-term forecasts that suggest these events are not only more frequent but more severe.
Locally, certain neighborhoods are more susceptible to this kind of risk—and insurance providers know it. Areas like the Fifth Ward and The Point in Newport are beloved for their historic charm and proximity to the water, but their low elevation and aging infrastructure make them especially vulnerable to coastal flooding and storm surge. In Portsmouth, the Island Park and Common Fence Point neighborhoods offer beautiful water views, but many homes there sit within FEMA-designated flood zones. In Middletown, the Easton’s Point neighborhood is also inevitably at higher risk. If a major hurricane or storm surge were to hit, these neighborhoods would likely be among the first and hardest hit, an unfortunate reality that’s factored into the premiums homeowners pay.
Industry-wide, these risks have already started to shake the insurance market. According to a recent Providence Journal article, at least two companies have stopped selling home insurance in Rhode Island altogether. Another specialized coastal insurer has gone into receivership, canceling thousands of policies. A growing number of homeowners have been forced into the Rhode Island FAIR Plan, a state-run program that acts as an insurer of last resort—often with premiums 40% to 50% higher than the private market. These market shifts are especially noticeable in Newport and Washington counties, which now rank among the top regions nationally for policy non-renewals.
For buyers, these rising costs can quickly turn a dream home into a budget buster. A quaint home near the water might seem like it’s within reach—until you factor in thousands of dollars per year in flood insurance, windstorm coverage, and rising base premiums. It’s why I always advise clients to ask the right questions before investing in a specific property. Is the home located in a high-risk flood zone? Is separate wind or hurricane insurance required? Has the property experienced previous claims? These answers can make or break your decision and should be part of your process as you navigate a potential purchase.
The good news is that there are trusted local resources to help navigate this complex part of the buying process. One of the best in the business is Robert Leary, owner of City by the Sea Insurance right here in Newport. Robert and his team understand the nuances of insuring homes in our unique market, and they offer valuable insights into how premiums are trending and what coverage is essential. He recently noted that many new homeowners are caught off guard by how much insurance can influence the monthly cost of owning a coastal home and that trend isn’t slowing down anytime soon.
Another great local resource is Luke Devine, of Carey Richmond & Viking Insurance. Devine told WhatsUpNewp more about some of the regulatory challenges of insurers in the Ocean State. “Insurance companies have limits on how many policies they can offer in coastal areas because of the high risk of storms and hurricanes. To spread out that risk, they have to write a certain percentage of policies inland. Reinsurers—the companies that insure the insurers—are lowering the percentage of policies allowed in high-risk coastal areas and increasing the percentage required inland. For example, a company might now only be able to insure 5–10% (down from 20-25%) of its homes near the coast, with the rest needing to be further inland. These limits are often set by reinsurers and even some state regulations.”
Insurance companies throughout the state will confirm what many of us in the real estate industry have already seen: insurance costs are climbing, and the safety net many homeowners once took for granted is shifting. Unlike interest rates, there’s no quick fix or foreseeable decline. This is the new normal especially for those looking to live in the Ocean State, making the cost of acquiring and maintaining homeownership in Rhode Island that much more difficult.
As a local real estate professional who lives and works in Newport, I see these trends not as reasons for panic, but as calls for preparation. My job is to help clients understand the full picture of homeownership, not just the listing price. That means being transparent about insurance costs, flood zone implications, and the total cost of living in some of our most beautiful (and vulnerable) neighborhoods. It also means encouraging homeowners to be proactive. Taking time to invest in and care for your home can go a long way when it comes to both protecting your property and keeping insurance premiums manageable. Routine maintenance like trimming overgrown branches that hang over your roof, cleaning gutters to prevent ice damming, ensuring downspouts extend away from your foundation, maintaining your roof and siding, and installing a sump pump or drainage system in your basement can help reduce the likelihood of future claims and demonstrate to insurers that your home is less of a risk.
If you’re thinking about buying, selling, or investing in coastal property, now more than ever, it’s critical to have a local expert in your corner. I’m here to help guide you through these decisions with clarity, honesty, and insight—whether you’re navigating your first purchase or growing your real estate portfolio. Coastal living is still worth it but like the tide, it’s wise to know what’s coming in.
Tyler Bernadyn is a licensed Realtor, lifelong Rhode Islander, and co-owner of RE/MAX Results. He writes a weekly real estate column for What’s Up Newp. Contact him at tyler@remaxresultsri.com for local advice, trusted resources, and real estate insight across Newport County and beyond.