New American launches insurance marketplace

New American Funding announced the launch of an insurance affiliate, which will offer homeownership coverage, alongside a range of other protections.

In a deal with insurance distribution firm The Baldwin Group, New American will sell primary property coverage in addition to products to guard homeowners against flood and wind damage. The affiliate, named NAF Insurance Services, will also make available auto, boat, pet, life and disability coverage. 

The addition of the new business comes as homeowners grapple with challenging levels of affordability, with high housing costs compounded by fast-rising property taxes and insurance rates. NAF will partner with over 50 different carriers across all 50 states to help customers seeking cost savings, it said.  

"Rising insurance rates are challenging for many families, but they shouldn't have to settle for less protection or higher costs," said Jeff Kvalevog, chief strategy officer for New American Funding, in a press release. 

"With the support of The Baldwin Group, NAF Insurance Services is designed to simplify the client experience and help customers find coverage they can trust without added stress," he added. 

In addition to his C-suite role with the Tustin, California-based lender, Kvalevog will also serve as president of the new insurance affiliate.  

NAF Insurance will work closely with the New American mortgage team, designating a dedicated representative to assist clients of each lending officer, branch and sales region. Spanish-speaking insurance advisors will also be available to provide services when needed.

The effect of rising insurance costs

New American's new business launch comes as the rising cost of insurance premiums emerge as a possible barrier to the homeownership goals of many potential buyers. In the three-year stretch between 2021 and 2024, the annual cost of homeowners' coverage accelerated by 24% across the country when compared against the previous 36 months, according to the Consumer Federation of America.

CFA also determined homeowners in one-third of U.S. ZIP codes saw premiums spike by more than 30%. 

In a separate study released earlier this year, mortgage fintech Maxwell found a majority of homeowners would consider selling their current properties if insurance costs continued accelerating at the current pace. Close to half were also concerned about their ability to keep up with monthly housing payments at the rate insurance and property taxes were rising. 

Helping drive the precipitous increase of homeowners insurance is the decision of some of the largest carriers to cease doing business in disaster-prone areas in recent years that left few affordable options available to residents. 

As home lending has slowed since the pandemic-era housing boom, some mortgage companies have also leaned into other business segments — including insurance — as a source of new revenue. New American joins Rate, which in 2024 expanded the scope of its long-standing insurance business to extend coverage beyond property protection through a digital marketplace.