How destructive weather is stirring up home insurance storms
As extreme climate events intensify, rising insurance costs and shrinking coverage are reshaping where — and how — Americans can afford to buy and own homes.
Key points:
- The cost of a standard homeowners policy in the U.S. jumped over 40% from 2019 through 2024, with the biggest increases occurring over the last two years.
- In regions with a greater risk of climate disasters, costs are even higher. Some insurers have stopped renewing policies in those areas, leaving buyers and homeowners with few options.
- Some buyers are already reporting that they've had to change their home search area due to insurance challenges.
Editor's note: This column is drawn from a deeper analysis of the impact of climate-related insurance costs on the real estate industry. Real Estate News is an editorially independent division of T3 Sixty.
As severe climate events hit more areas of the country, considerations around purchasing and owning a home are changing for many Americans — even if they don't realize it yet.
These events are having a direct impact on the cost and availability of homeowners insurance, which, in turn, has longer-term implications for real estate consumers and brokerages.
Destructive weather events are increasing
In the first week of July 2025, the Madre fire burning over 50,000 acres in California surpassed January's devastating fires in Los Angeles to become the state's largest fire of the year. That same week, flash floods in Central Texas killed more than 100, making it the deadliest flash flood in the U.S. in half a century.
Severe weather events like these are growing in frequency and intensity across the country.
In 2024, the nation experienced 27 confirmed weather- or climate-related disasters with losses exceeding $1 billion each — twice the annual average of similar disasters (inflation-adjusted) for the previous 40 years — according to the National Centers for Environmental Information.
This means more homebuyers and homeowners must contend with risks and costs related to climate events, particularly when acquiring insurance.
Insurance costs are rising everywhere — but even more in high-risk areas
The cost of a standard homeowners policy in the U.S. jumped 40.4% from 2019 through 2024 to $2,801, according to a LendingTree analysis of data from S&P Global's RateWatch, with the biggest increases occurring over the last two years.
Annual % change in home insurance rate by year:
Because mortgage providers require home insurance on the homes they underwrite, it is a necessary — and increasing — expense.
That's especially true for homeowners in higher-risk areas, who paid an average of $500 more in annual premiums than those in lower-risk areas in 2023, the National Bureau of Economic Research found in an analysis of over 47 million households' property insurance expenditures from 2014 to 2023. In 2018, the discrepancy was $300.
While climate events and related home insurance costs are impacting more homeowners and buyers, those issues are rarely a primary factor in a move: Less than 1% of Americans cited climate change or natural disaster concerns as a reason for moving in 2022, according to U.S. Census Bureau data.
These issues will likely become a bigger consideration for movers in the coming years, however, as the impacts of climate events increasingly hit their wallets.
Today's insurance challenges in context
A decade ago, few insurance companies had strategies for addressing climate risk. today, many are factoring those risks into their modeling — and raising rates, reducing coverage, increasing premiums or adding exclusions — but intensifying extreme weather events are making it more difficult for these companies to see positive returns.
When insurers decide they cannot make it work, they exit the market, leaving state-funded plans, considered the insurers of last resort, to fill the gap.
To better understand insurance challenges, one can look at the trends in Miami-Dade County in Florida, Harris County in Texas and Los Angeles County in California — each of which have FEMA risk scores above 99 (out of 100), putting them in the top 1% nationally for overall risk from natural hazards.
These three areas have seen significant increases in insurance premiums and the use of insurers of last resort, which provide less coverage than typical insurers, leaving homeowners exposed to more risk and costs. That, in turn, impacts the longer-term real estate demand and accessibility of these areas.
A closer look at high-risk metros
Miami: Homeowners insurance premiums in Florida are the highest in the country, increasing 47% from 2019 to 2024 due to intensifying hurricane risks, according to First Street. In three large metros, the increases were significantly higher: Miami (322%), Jacksonville (226%) and Tampa (213%).
In Miami-Dade County, the average premium is $6,000 per year, roughly double the state's average. That appears to be pushing more homeowners and homebuyers to work with the state's backup insurance program, Citizens Property Insurance Company.
The value of Citizens policies in Miami-Dade County increased 42.6% between July 2020 and July 2025, while overall policies increased 40.8%. That means more homeowners in the county have less robust insurance, leaving them vulnerable to home-damaging climate events.
Insurance challenges may also be contributing to migration trends. According to a Redfin analysis, Miami ranked fifth among the top 10 metro areas to see the biggest year-over-year increase in net outflow in 2024.
Houston: Harris County, home to Texas' largest city, suffered $160 billion in Hurricane Harvey damages in 2017, according to NOAA. That came on the heels of two years of severe flooding causing $6.5 billion in damages.
From 2015 to 2023, Harris County homeowners insurance premiums increased by 43% to $3,325, according to an analysis by Kinder Institute at Rice University. In and around Houston, increases were closer to 60%.
As in other high-risk areas, insurers have begun pulling back. After Hurricane Beryl hit in 2024, Progressive announced widespread non-renewals and temporary restrictions on new policies. Foremost Insurance, a subsidiary of Farmers, had stopped writing and renewing policies two weeks before Beryl hit.
The Texas FAIR Plan, the state's insurer of last resort, issued nearly 110% more homeowners policies statewide in Q1 2025 compared to Q1 2020, with Harris County accounting for more than 42% of those policies.
While Houston is still gaining residents, net in-migration fell more than 46% between 2023 and 2024, Redfin found.
Los Angeles: In the wake of the Palisades and Eaton fires, which erupted in Los Angeles County in January 2025, private insurers appealed to state regulators for $1 billion to help cover their losses.
The assessment, approved in February 2025, will inevitably be passed on to consumers. The average annual premium in the state is expected to increase by approximately 21% year-over-year in 2025 to nearly $3,000, according to an analysis from Insurify.
Insurance has also become harder to find. State Farm, California's largest provider, stopped writing new homeowner policies in the state in 2023. In September 2024, the firm announced its intention to drop more than 1 million policies over the next five years.
Like in Florida and Texas, California's last-resort insurer (the FAIR Plan) has seen a dramatic increase in enrollment. From September 2021 to June 2025, the dwelling policy exposure jumped 289.1%.
First Street labels Los Angeles County — which has a FEMA risk score of 100 — a "tipping point" community, meaning it predicts the county will see its population decrease in response to insurance challenges over the next 30 years.
Implications for the housing market
Climate volatility will increasingly impact home prices, demand and migration patterns.
Some effects on buyer behavior are already showing up. According to an August 2025 survey of 1,000 prospective and recent homebuyers by Realtor.com, more than a third of respondents (33.7%) said home insurance challenges forced them to completely change the geographic area of their home search. Thirty percent said they looked at natural disaster risk data as part of their home search, and 44% planned to do so in the future.
First-time homebuyers are likely to feel the effects of rising costs most acutely. They typically have a mortgage, and are thus required to have homeowners insurance, and may already be stretching to meet their monthly payments.
Some potential homebuyers, facing difficulty getting private insurance, may decide to look elsewhere. As a result, home sellers could see a shrinking pool of buyers in their area, forcing them to offer concessions or lower their home price.
How policymakers and real estate professionals can help
State legislatures and insurance commissioners have passed laws and changed procedures to encourage insurance price transparency and set price hike thresholds. Meanwhile, consumer advocates have taken legal action to try and force rate rollbacks and to provide evidence of the rate burden on consumers.
Some states are focusing on preventive measures. Alabama offers grants to homeowners to fortify their home against wind damage and mandates insurance companies provide discounts on fortified homes. Louisiana implemented strict elevation requirements for new construction in flood zones after Hurricane Katrina, and California's building code requires fire-resistant materials and vegetation management in wildfire zones.
Brokers and agents can also play a role by more deeply understanding home insurance costs and availability in their region. More broadly, real estate professionals can provide a valuable service to consumers by:
Alerting them to areas more susceptible to climate event impacts
Encouraging buyers to weigh how climate risks might affect property values over time
Drawing attention to proximity to essential services and emergency response facilities, which could prove more important than ever before
Learning about market climate adaptation and infrastructure plans to help buyers and sellers understand how premiums may be affected
Identifying climate resilience features of a home (or their absence)
Helping buyers budget for any mitigation efforts they may need to take on
Educating sellers about fortifications they could add to better prepare their homes for market